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Case number 15-1036, Southwest Airlines Code Petitioner versus United States Department of Transportation.

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Mr. Goldberg for the petitioner, Mr. Schulz for the respondent, and Mr. Harris for the intervener.

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May it please the court?

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Good morning.

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On behalf of the petitioner Southwest Airlines, with me today are Southwest General Counsel Mark Shaw and Associate General Counsel Robert Knisely.

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And I would like to reserve two minutes for rebuttal.

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In its December 17th letter, the DOT handed down express and non-tenant directives to the city of Dallas for the imposition of forced air carrier accommodation at Love Field Airport.

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There's nothing in the letter that the DOT directives were preliminary, tentative, or non-binding.

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Rather, the letter is essentially an edit issued by the chief regulatory agency to the operator of Love Field who relies on that same agency for millions of dollars in funds and airport grants.

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And the letter states conclusively that the city must honor

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the forced accommodation of a requesting airline as long, based on a snapshot date when the request was made, and as long as the pattern of service continues.

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And this summarily reversed decades of agency practice, which this type of snapshot date and basically permanent forced accommodation had never, ever been approved or ordered before.

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Can I ask this question?

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What if the letter said everything that it says, and then at the end it says the following?

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Because this letter only offers guidance, it is not intended to constitute a definitive resolution of the dispute between Delta and the city.

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That would not be enough, Judge Trudy-Vassin, because... That would not be enough to do what?

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To remove this court's jurisdiction and making this a final order that needs to be considered, because... You think it would still be final?

[00:02:26] Speaker 03:
It would still be final.

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Even if it said it's not definitive?

[00:02:29] Speaker 04:
Yes, it may not be definitive as to the ultimate global issue as to whether or not Delta needs to be accommodated, but the letter is much more narrow in what we're challenging.

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It has a legal directive without being subject as a preliminary determination or being subject to being revised down the road that says, our position is as follows.

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Forced accommodation must last for the entire pattern of service.

[00:02:53] Speaker 03:
Right, but I – so I take it your argument on this score is that

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You can have a blanket statement to the effect that the letter is not definitive, but that doesn't mean that there are particular sub-aspects of the letter that aren't definitive.

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But as I read a coda that says, this letter is not definitive, what it's saying is, this letter is not definitive, meaning the stuff that we've talked about in this letter, including the sub-aspects.

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It would be how the language was used, of course, Judge Sridivasa.

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And if it basically said, this is our tentative position, preliminary position, we want to hear what the parties say, we're going to keep an open mind, then, of course, this would not be a final order.

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That's not what we have.

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Or if it said, on the ultimate issue as to whether Delta has been treated right, we are going to have an open mind.

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However, when it comes to some legal principles, here is chapter and verse what it is.

[00:03:41] Speaker 03:
OK, so then you've baked into it, and I think that makes sense, the notion that

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the agency wants to hear further from the affected party.

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So if it says it's not intended to constitute a definitive resolution, and then it also says that we'll hear further argument on these or any relevant topic, including the guidance provided in this letter, then you would say it's not final.

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If the letter, which it doesn't say obviously, if it basically said, we're keeping an open mind.

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So then I guess my question is this, that everything I just said is basically a quote from the Chapter 16 action.

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The NOI.

[00:04:21] Speaker 03:
Yeah, the NOI.

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And so why can't we just say that based on what we now know, whatever we might have known at the time of the letter, based on what we now know under the letter of the NOI,

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December 17th letter wasn't final.

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If the NOI had gone further and said the statements regarding forced accommodation and use of a snapshot date are withdrawn and revoked, we may get there again, but we jump the gun.

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And we want to have an open mind and consider what the parties have to say, then I would agree.

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I wouldn't be here today.

[00:04:52] Speaker 02:
Why does the party have to repudiate what they said before in order for

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for that language to mean to be taken at face value when they say our decision isn't final.

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I mean, you know, that's not the way language ordinarily works.

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It's not, you know, these are my tentative views.

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You know, if I say I think I'm going to, I'm inclined to agree that this petition should be granted, but those are only tentative views subject to what I hear today at oral argument.

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That's a tenet of view.

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I don't have to say that I hereby repudiate what my tenet of view is.

[00:05:39] Speaker 04:
Certainly, Judge Wilkins, if there was anything in the record where they said one way or another that the directives in the December 17th letter were not conclusive in the consummate decision making on those issues, I would agree.

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The fact that they say, we're going to have an NOI, Part 16, and we're going to look at the issues to how the airport is treating Delta generally, doesn't mean that they've given any indication to the city, or to Southwest, or to Delta, or to the FAA, to the extent they were following DOT's lead, that those three legal directives in the December 17th letter are open to debate.

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So we have the December 7th.

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Let's just talk about the city for a second and then ignore the distinction between the city and the airlines for now.

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And it says the city will be afforded a full opportunity to raise arguments in this proceeding on these or any other relevant topic, including the guidance provided by the DOT letters of December 2014 and June 2015.

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That sounds like a pretty blanket statement to the effect that

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there were letters that were issued, and now the city is going to have a full opportunity to air whatever's encompassed by those letters.

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And it's like the Appalachian Power case that we cite, where the court said, we understand laws are subject to change, and that was actually a guidance document may change, but for now, it hasn't changed.

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for the part 16, they take a long time.

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They take years.

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We don't know how long it's going to take.

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Southwest would not be a formal party.

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At some point, they might be able to intervene after the hearing date has been set.

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So we go on for year after year with this at best uncertainty,

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and unfortunately it's more than uncertainty because if you're the city of Dallas and millions of dollars depend on you're complying with what the FAA and the DOT says you have to do the only message that's out there right now is in the December 17th letter repeated yet again in the June 15th letter all of which all the uncertainty would be equally the case if the December

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letter said on its terms, these are our preliminary views, but it's not definitive, and we'll continue to think about it.

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You'd still have the uncertainty throughout the entire course of the Chapter 16 proceeding.

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I don't believe it would be the same, because if you're from the city's perspective, you would say, okay, it's like there's an investigation out there.

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If it was just the investigation, or there's a preliminary rule,

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and we get to comment and we get to and nothing is going to happen that's going to be definitive until the process takes place.

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Here we don't have that.

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We have the DOT issuing three directives which are very serious and have interfere with Southwest lease rights at Love Field and that's the bell has been rung and it hasn't been unrung.

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We would submit your honors that whatever's in the NOI is not unringing the bell of

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You've asked, and here's what we're telling you, thou shalt make sure your accommodation is, in effect, permanent as long as Delta wants those five flights.

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It has to be based on a snapshot date.

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Of course, the critical problem for Southwest right now from this is that they were waiting for years to get

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real use of Lovefield and then they finally get it and the right amendment is lifted and then it takes a while to ramp up service but before they can ramp up that service Delta makes this request and now because of the DOT letter everything's frozen in time and Delta is using their lease rights which they paid millions of dollars for so the NOI

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doesn't go as far as it needs to.

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If it said, we are withdrawing, we are rescinding, we are suspending even what's in the letters, that would be a different issue.

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But right now, it's the Wizard of Oz issue, pay no attention to the man in the room, but those directives are out there in the city.

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Nobody in the city wants to be the bureaucrat who says, well, we're going to ignore what's in that letter and be responsible for the city losing federal funds.

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It's a very serious adverse consequence.

[00:09:31] Speaker 05:
It seems to me that we've said time and again, Supreme Court said time and again, that finality turns on a couple of specific consequences, and not on whether the agency says this isn't final.

[00:09:45] Speaker 05:
Correct.

[00:09:46] Speaker 05:
Exactly.

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I mean, that it says it's not final may lead

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one to some reason to think that it actually isn't final, but if it has the consequences, the two required consequences, it's final regardless of what the agency says.

[00:10:05] Speaker 04:
Absolutely, Your Honor.

[00:10:06] Speaker 04:
We cited some of that case law in our reply brief.

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Agencies often try to do something

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It'd be helpful, but not always for notice and comment, which was what was required here.

[00:10:15] Speaker 04:
We had Judge Trudy Vassin, I was before you, a year and a half ago, for the Security Point case, a similar situation where the chief counsel and the TSA had done something in a letter, you know, and this court properly found that that letter was final because it had adverse consequences and it was the consummation of the agency's decision-making process.

[00:10:34] Speaker 04:
We have nothing in the record that says that the DOT has agreed to reconsider the three key legal directives in the letter.

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And we also submit that it's a legislative or substantive rule because it creates new rights for non-signatory airlines.

[00:10:50] Speaker 03:
In Security Point, there was also no substantive action, right, along the lines of what's in the NOI.

[00:10:57] Speaker 04:
In Security Point, there was just the letter that Ms.

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Koerner had written, and it said, you can't deal with these airports anymore.

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Right.

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And the agency didn't submit something subsequently that purported to characterize what that letter said.

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No, that's true, nor did they rescind that issue.

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And as long as it was similar, as long as the airports out there thought TSA wasn't going to be happy if we contract with SecurityPoint, then that was enough.

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And that's the situation we have now.

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Because this has created new rights for non-signatory airlines, such as Delta.

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The D. O. T. Directives impose new obligations on the city never before totally unprecedented that they would have to make these accommodations permanent and then breach and violation of the signatory airlines least rights and imposes a new obligation on Southwest that has to accommodate a carrier, even though see,

[00:11:46] Speaker 04:
What the rules before, the policies before were key on, we didn't want airlines hoarding gates to basically mess with their competitors.

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In other words, don't pretend to use a gate.

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That's not in this record at all.

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Southwest was waiting for the lifting of the right amendment.

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It finally happened, and they had slowly, for operational and commercial reasons, it wasn't the day after that they started up to 180 flights a day, but they were always prepared to go there.

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But this interfered in between.

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And it's happening, and it has a real world impact.

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The city, after the DOT letter, an issue in this case, signed a consent for the sublease of the United Gates, but said in there, the DOT directive is binding directive that we have to follow.

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And then the DOT, you know, wants to talk about subsequent events, and they want to talk about the NOI, but the only real significant subsequent event was on June 15th of 2015, the DOT sent another letter to the parties, to Dallas, which reiterated and reaffirmed everything in the December directive.

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So I think from the city's perspective, the DOT is very clear as to what they want the city to do.

[00:12:54] Speaker 03:
The city also filed the action in district court, right?

[00:12:57] Speaker 04:
Right.

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Two days later, the city files its action, puts up its hands, and says, we're scared.

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We don't know what to do here.

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And then the judge, on a preliminary injunction, and we all did supplemental submissions the last week or so, issues a decision on state law issue.

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But what's interesting is he cites, for two or three pages,

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the December 17th letter and the June 15th letter from DOT.

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And then he ends up making a preliminary injunction finding that completely tracks what's in those letters as far as the snapshot date and as far as the permanent duration.

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So the bell's been rung.

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There's nothing in the N.O.I.

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that unwind that bell.

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We're dealing with a very serious draconian situation right now.

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The way to have that relieved is to have this court, with all due respect, vacate the letter.

[00:13:46] Speaker 04:
There's no reasoning behind it, just like with Judge Francine Kerner's letter.

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There's no analysis.

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There's no attempt to deal with any of the issues.

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So even the DOT in their brief says, we understand if it's a final order, it's page 36, it can't stand on its own.

[00:14:03] Speaker 04:
So we've made lots of other arguments that we think are important as to why it's arbitrary and capricious, why they failed to consider the fact that DFW is in the area and can accommodate all the Delta flights and many other flights.

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That there's a WARAA statute, one of the reasons why we think we have standing.

[00:14:19] Speaker 04:
Certainly Southwest was part of the

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the airlines behind the right amendment reform act.

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And that requires very specific things that Delta DOT in the city need to abide by.

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And none of that has happened here.

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So we think that there's plenty of reasons for why this letter is

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arbitrary and capricious and violates federal statute.

[00:14:41] Speaker 04:
Obviously, jurisdiction is an important issue, but there's nothing in the NOI that unrung the bell, and that's what we need here.

[00:14:48] Speaker 04:
We need to have this letter withdrawn.

[00:14:50] Speaker 05:
Mr. Gilbert, am I correct in understanding that you have a separate action filed challenging the June 15 – June 2015 letter?

[00:14:59] Speaker 05:
That's right, Your Honor.

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And that that is pending in this Court.

[00:15:03] Speaker 05:
It is, Your Honor.

[00:15:05] Speaker 05:
Now, therefore, here's my question.

[00:15:07] Speaker 05:
The June 15 letter, June 2015 letter, like the NOI, reflects back on the 2014 letter.

[00:15:20] Speaker 05:
But the June 2015 letter specifically relates back and references the durational permanence requirement.

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And actually supplies a rationale for it, which was not in the 2014 letter.

[00:15:34] Speaker 04:
It's a longer letter.

[00:15:36] Speaker 04:
They tried to do a little bit more.

[00:15:38] Speaker 05:
Okay, they're elaborating.

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But with respect to your concern, they provide a reason that wasn't in the previous letter.

[00:15:46] Speaker 05:
There might be more reasons, there might be counter reasons to unhorse this.

[00:15:51] Speaker 05:
They may be on the wrong track, but they've supplied something.

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So if, as you're requesting, the 2014 letter is vacated, the 2015 letter is still standing.

[00:16:05] Speaker 05:
Does the vacature of the 2014 letter have any implications for the 2015 letter?

[00:16:13] Speaker 04:
Great question, Your Honor.

[00:16:14] Speaker 04:
We obviously filed suit within 60 days on that letter as well, so that was filed in August.

[00:16:19] Speaker 04:
They do a little more, but not nearly enough.

[00:16:21] Speaker 04:
By that I mean they don't deal with the WARA issue at all, the Right Amendment Reform Act issue.

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They don't deal with the fact that everything the DOT said in those two letters

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is contrary to industry and agency practice for 30 years with regard to these accommodations and snapshot dates.

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They don't deal with, for example, Southwest's argument that you need to consider Love Field as part of the greater Dallas market.

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So I think we have a very similar argument if it comes to that.

[00:16:49] Speaker 04:
Obviously,

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I think that we have to take them one step at a time.

[00:16:53] Speaker 04:
These cases, that case was stayed.

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We haven't briefed it yet.

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We don't think that letter has any more merit to it than the December 17th letter.

[00:17:03] Speaker 04:
It suffers from all the same problems and whatever they did, it was not enough.

[00:17:06] Speaker 05:
Now, um, as far as again on the issue, would our vacatur actually give you any relief?

[00:17:14] Speaker 04:
It would give us that relief, Your Honor, because it would take away the December 17th letter, which the city said was final and binding, which the city used for accommodation principles that embraced that.

[00:17:29] Speaker 04:
We wouldn't dismiss our June 15th appeal, certainly.

[00:17:33] Speaker 04:
We would obviously have to continue that unless they withdrew the letter.

[00:17:36] Speaker 05:
Is there anything in the suit filed by the city that would turn upon or be affected by the status of these two letters?

[00:17:45] Speaker 04:
Yes, in the sense that the judge Kincaid, we believe, took seriously what the DOT position was, and he ended up tracking it.

[00:17:53] Speaker 04:
Now, he didn't say, it's not his job, it's your job to review the letter under 46110, but he did cite the letters extensively, and if nothing else, there was a psychological issue that that's what the DOT was saying.

[00:18:05] Speaker 05:
It's a situation on the ground.

[00:18:06] Speaker 05:
Is there a stay order or a hold study order in the case of Cone City?

[00:18:13] Speaker 04:
The judge granted the city's preliminary injunction and also Delta's, which meant basically Delta gets to keep those five flights until something else happens.

[00:18:23] Speaker 04:
Southwest has filed an appeal with the Fifth Circuit, in which case Judge Kincaid stayed his case.

[00:18:29] Speaker 04:
So that district court case is not going on, and there is a Fifth Circuit appeal.

[00:18:35] Speaker 04:
As far as the – a couple of just points to rebuff from the government side.

[00:18:41] Speaker 04:
We don't think this is an interpretive rule.

[00:18:42] Speaker 04:
We don't think this is a policy statement.

[00:18:45] Speaker 04:
It's not an interpretive rule because, as in the Simcor case, there's no linguistic expression

[00:18:51] Speaker 04:
There's nothing in the statute or in a regulation that the DOT was actually construing or trying to define.

[00:18:59] Speaker 04:
And a general policy statement would have discretion.

[00:19:03] Speaker 04:
It would say, we want these factors to be considered, obviously.

[00:19:07] Speaker 04:
It wouldn't be a binding norm, which is the way these letters are written.

[00:19:11] Speaker 05:
Wouldn't their best argument, though, in that regard be that the

[00:19:21] Speaker 05:
I think it's the assurances, or maybe it's the competitive plan statute, I think it's the assurances, require the city to operate on a non-discriminatory basis and to make the facility available to the public on reasonable terms.

[00:19:39] Speaker 05:
And that seems to be the closest source to which they could come and say, that's what we're doing when we say the permanence of the requirement.

[00:19:49] Speaker 04:
I think that's the source, but this is why it's substantive rulemaking, Judge Ginsburg, because you can't track that language and get to an interpretation that results in their legal directives.

[00:19:59] Speaker 04:
In the Simcourt case, this court said that the distinction between an interpretive rule and a substantive rule likely turns on how tightly the agency's interpretation is drawn linguistically from the actual language of the statute.

[00:20:12] Speaker 04:
here whatever the DOT was doing in their letter, they weren't drawing legal directives from linguistically from the actual language of a statute or a regulation.

[00:20:22] Speaker 04:
They were making law, which is, you know, they're entitled to do if they follow the APA, which in this case at a minimum required prior notice of comment.

[00:20:29] Speaker 05:
So the breadth and generality of those terms of the assurance, as you say, make the link to the tenure to say this is an interpretation.

[00:20:41] Speaker 04:
In this case, it does.

[00:20:42] Speaker 05:
In fact, it's actually filling it out itself.

[00:20:46] Speaker 04:
It's legislating, basically.

[00:20:49] Speaker 03:
Can it not be an interpretation of the assurances?

[00:20:52] Speaker 04:
It's not, because the assurances really don't say anything more than what we've been talking about here.

[00:20:56] Speaker 05:
I suppose we could point to cases in which another agency, say the Federal Communications Commission, under the rubric of its public interest mandate, has said things of this specificity and said, you know, that's within the public interest, and was not held to proceed by notice of comment.

[00:21:18] Speaker 05:
Does that reflect back on whether this is too tenuous in this case?

[00:21:24] Speaker 04:
I know there's a lot of those cases and every case is different and the statutes are different.

[00:21:27] Speaker 04:
We did cite one of the cases, an FCC case in our materials in our opening brief, I believe, for the position that general, this happened to be an FCC case, the general FCC authority under the statute doesn't give them carte blanche to issue regulations without notice of comment.

[00:21:45] Speaker 04:
So I know that's the example that comes to mind, Judge Ginsburg, where, in fact, the general authority of the FCC, which is pretty strong, was not sufficient to avoid notice of comment, and that's on our materials.

[00:21:57] Speaker 05:
In the name of the case again?

[00:21:59] Speaker 04:
I can get it with the Revitalize.

[00:22:01] Speaker 04:
That's fine.

[00:22:01] Speaker 04:
I'll find it in a second.

[00:22:02] Speaker 03:
Thank you.

[00:22:03] Speaker 04:
Thank you.

[00:22:15] Speaker 06:
May it please the court, Benjamin Schultz on behalf of the government.

[00:22:19] Speaker 06:
The agency letter that is challenged in this case is not final agency action.

[00:22:23] Speaker 06:
And it's not final agency action for two separate and independent reasons.

[00:22:27] Speaker 06:
First, it was not a consummation of the agency's decision making.

[00:22:31] Speaker 06:
And second, the letter has no legal effect.

[00:22:34] Speaker 05:
Are we focusing now on just the portion under challenge, duration and permanence?

[00:22:38] Speaker 05:
I'm sorry.

[00:22:39] Speaker 05:
When you say it has no legal effect and whatever else you said about it, we're focusing just on one provision that the petitioner is claiming is fine.

[00:22:48] Speaker 06:
That's correct.

[00:22:49] Speaker 06:
There are opinions offered in the letter, but none of those opinions have legal effect.

[00:22:53] Speaker 06:
And that's because before the letter was issued and after the letter was issued, the city's obligations were exactly the same.

[00:23:00] Speaker 06:
The city had to obey the grant assurances.

[00:23:02] Speaker 06:
It had to obey.

[00:23:03] Speaker 05:
But what the grant assurances means was never before announced to be that the accommodation.

[00:23:11] Speaker 06:
But I think that just goes to exactly what the letter is doing.

[00:23:13] Speaker 06:
There is a statute and the statute is somewhat ambiguous.

[00:23:16] Speaker 06:
It could be subject to different interpretations.

[00:23:19] Speaker 06:
The city approached D.O.T.

[00:23:20] Speaker 06:
in it as per guidance.

[00:23:22] Speaker 05:
What's the provision you're interpreting?

[00:23:24] Speaker 06:
Sure.

[00:23:24] Speaker 06:
So there are the two grant assurances.

[00:23:26] Speaker 06:
They derive from two statutes, and we've cited them in our briefs.

[00:23:30] Speaker 06:
And what the statute says is that when DOT enters into an airport grant, it has to obtain certain assurances.

[00:23:37] Speaker 06:
And so the two relevant ones here are, one, that the airport has to be available without unjust discrimination and on reasonable terms.

[00:23:45] Speaker 06:
And then also, there's a prohibition on granting an exclusive right.

[00:23:48] Speaker 05:
And there's also— Those were not cited as the rationale in the second letter.

[00:23:52] Speaker 06:
They actually were cited as a rationale in the second letter.

[00:23:55] Speaker 06:
I think Your Honor may be referring to the first letter.

[00:23:57] Speaker 05:
Well, the first letter had no rationale.

[00:23:59] Speaker 05:
The second letter has a rationale, and I think its entirety is this.

[00:24:05] Speaker 05:
Allowing a requesting carrier to continue a similar pattern of service is necessary in order to make any accommodation economically meaningful

[00:24:13] Speaker 05:
Requesting carrier to be pushed out after a short time period, new entrants would have very little incentive to ever seek to initiate services in a limited capacity area.

[00:24:24] Speaker 06:
Respectfully, I think you need to go one paragraph earlier.

[00:24:26] Speaker 06:
Earlier?

[00:24:27] Speaker 06:
Yes, and if you look at the paragraph right above that, and I'll just read from it.

[00:24:30] Speaker 06:
Go ahead.

[00:24:31] Speaker 06:
It's DOT's view that making reasonable efforts to accommodate new entrants or other carriers seeking an expansion at Love Field, as described in our December 17 letter, follows the airport's obligation to make the airport available on reasonable conditions and without unjust discrimination.

[00:24:46] Speaker 06:
Likewise, efforts to accommodate new entrants or other carriers

[00:24:49] Speaker 06:
seeking expansion at Love Field, ensure that the airport is not given an exclusive right to the carrier to airport.

[00:24:55] Speaker 06:
So the agency is very explicitly invoking both of those grant assurances and a statute from which it derives.

[00:25:01] Speaker 06:
Now the fact that the paragraph that your honor cites doesn't talk about them still doesn't mean they don't derive from them because what that paragraph is talking about is just saying logically from that previous paragraph that does expressly rely on those grant assurances

[00:25:14] Speaker 06:
In order to make everything that was said in the previous paragraph meaningful, then DOT goes on to explain why it's doing what it's doing, why it's advising what it's doing.

[00:25:23] Speaker 06:
But of course, Your Honor, all of this I think is irrelevant because at the end of the day, the city has to abide by the grant assurances and nothing that the DOT says in this letter in any way changes that fact.

[00:25:33] Speaker 06:
At the end of the day, nothing can be done to the city unless one of two things happens.

[00:25:37] Speaker 06:
Either DOT files a district court action or DOT pursues an administrative proceeding and that administrative proceeding has a final result and the final result of that is to take some action against the city.

[00:25:49] Speaker 06:
So until either of those things happen, the city is in exactly the same position that countless other regulated entities are in when they face an agency guidance letter.

[00:25:58] Speaker 06:
As this court has said multiple times, sometimes the writing is on the wall and an entity

[00:26:03] Speaker 06:
may voluntarily conform its conduct precisely because it thinks it knows what the likely outcome is, were it to pursue all the way through an enforcement against the agency.

[00:26:12] Speaker 06:
But that does not make it final agency action.

[00:26:15] Speaker 06:
So just to give an example, in the Holistic Candler's case, which is from his circuit, you had the FDA, which issued a warning letter, and it threatened an enforcement action if the manufacturers didn't accede to what the FDA expressed as its view.

[00:26:28] Speaker 06:
Now, there's no doubt

[00:26:29] Speaker 06:
that the manufacturer felt pressure to conform to the FDA's view.

[00:26:33] Speaker 06:
There's no doubt that they felt that pursuing an enforcement action was probably something that wouldn't be very pleasant for them.

[00:26:38] Speaker 06:
But what this court explained was that it's still not final agency action, because if the manufacturer wanted to fight about it, it could be there.

[00:26:47] Speaker 06:
Well, first of all, it wasn't even entirely clear that an enforcement action would be pursued.

[00:26:51] Speaker 06:
And then even if it was, at that point, the manufacturer would have the opportunity to make its arguments, and the agency would make its final decision.

[00:27:02] Speaker 05:
You read a portion of the prior paragraph.

[00:27:05] Speaker 05:
Can you just tell me where on the page it appears?

[00:27:06] Speaker 06:
Absolutely.

[00:27:07] Speaker 06:
So this is page two of the second letter, which you can find.

[00:27:11] Speaker 06:
It's attached to the petition for review in that other DC Circuit case that Southwest filed.

[00:27:17] Speaker 06:
I think the paragraph that Your Honor was reading from was the very bottom paragraph that carries over to page three.

[00:27:22] Speaker 06:
The paragraph that I was reading from was the paragraph right above that.

[00:27:25] Speaker 06:
So this is on page two, right in the middle.

[00:27:27] Speaker 05:
I was actually reading from the full paragraph on page three.

[00:27:30] Speaker 06:
I'm sorry, the full paragraph on page three, then I see the confusion.

[00:27:33] Speaker 05:
So if you go back to page two.

[00:27:37] Speaker 05:
So I'm going to ask you then, now that we're on the same page, if you could just tell me, focus me again on the relevant portion of that.

[00:27:48] Speaker 06:
Yes, I'm sorry.

[00:27:48] Speaker 06:
So if you go over page two,

[00:27:51] Speaker 06:
And you look at the paragraph that's second from the bottom.

[00:27:55] Speaker 06:
This paragraph starts, it is DOT's view.

[00:27:58] Speaker 06:
So it is DOT's view that making reasonable efforts to accommodate new entrants or other carriers seeking expansion at Love Field, as described in our December 17 letter, follows the airport's obligation to make the airport available on reasonable conditions and without unjust discrimination.

[00:28:13] Speaker 06:
Likewise, efforts to accommodate new entrants or other carriers seeking expansion at left field ensure that the airport has not given an exclusive right to a carrier at the airport.

[00:28:22] Speaker 06:
So the agency is expressly citing those grant assurances and interpreting them.

[00:28:26] Speaker 05:
Well, I see it's citing those grant assurances, but I'm quoting them.

[00:28:32] Speaker 05:
But the quotations don't deal with the duration of the accommodation or the snapshot.

[00:28:38] Speaker 06:
Well, respectfully, Your Honor, if you read the agency's analysis, it proceeds first that they talk about the snapshot date, and then they talk about the duration of accommodation and the snapshot date analysis.

[00:28:49] Speaker 06:
is based on, in fact, if you look at the bottom paragraph onto, as explained in the December 17 letter, our view is that the grant assurances, so again, they're talking about the grant assurances, and then they talk about how there's a need both for practicality purposes and to avoid gaming the system, i.e.

[00:29:08] Speaker 06:
you don't want an incumbent carrier to be able to manipulate the schedules after the fact in order to keep someone out.

[00:29:15] Speaker 05:
So that- By looking to

[00:29:17] Speaker 05:
Not yet operating on schedule.

[00:29:20] Speaker 06:
Exactly right.

[00:29:21] Speaker 06:
And then so then if you go to the duration of accommodation, it's a similar principle.

[00:29:24] Speaker 06:
The idea here is what you don't want is the incumbent carrier able to see.

[00:29:28] Speaker 06:
Oh, wait a second.

[00:29:29] Speaker 06:
I had this vacancy in my schedule.

[00:29:31] Speaker 06:
Somebody swooped in and wants to use that vacancy.

[00:29:34] Speaker 06:
Now that they've done that, I'm going to retroactively change my schedule and kick them right out again.

[00:29:38] Speaker 06:
Because if somebody thought that, OK, I'm going to go through all this rigmarole, I'm going to request an accommodation, and it's going to be a big fight, and it certainly was a big fight in this case, if I'm going to spend all that money to go through that, only to be kicked out in two months, three months afterwards, I'm not going to bother in the first place.

[00:29:54] Speaker 06:
And then as a result of that, what a carrier could do is it could have all that vacancy in its schedule

[00:29:59] Speaker 06:
and never actually be tested, never be forced to do the accommodation, because it would always have the threat of swooping in after the fact and kicking someone out.

[00:30:07] Speaker 05:
So this is quite analogous, it seems to me, to the situation in which an agency says, look, the source on which we're relying is a statute.

[00:30:17] Speaker 05:
Here it's the grant assurances, but that doesn't matter.

[00:30:19] Speaker 05:
There's also the competition plan, which is set.

[00:30:21] Speaker 05:
That one could have been a tougher one.

[00:30:23] Speaker 05:
But the grant assurances anyway, like a statute, say reasonable accommodation and so on.

[00:30:32] Speaker 05:
And from that, we are now announcing that it's our view that a reasonable accommodation requires, A, a snapshot, B, disregarding the future, well, let's reach into the snapshot, and B, the actual permanence of the accommodation.

[00:30:53] Speaker 05:
And that's because our statute says, where the FCC says public interest, and this is what we're saying, the public interest requirement.

[00:31:00] Speaker 06:
I think it's important to put in common.

[00:31:03] Speaker 05:
Is that a classic situation for notice and comment?

[00:31:06] Speaker 06:
Respectfully, Your Honor, what this court's case law has said is just because the statutory duties may be vague and undefined, and the agency's later interpretation gives it specific effect, that does not make it a legislative rule.

[00:31:19] Speaker 06:
Because at the end of the day, the real question is, what is the legal effect of what the agency has done?

[00:31:23] Speaker 06:
And is there, I mean, first of all, the question is, the way the court has framed it is, is really what the agency has been doing.

[00:31:30] Speaker 05:
legal or practical effects can be taken into account?

[00:31:34] Speaker 06:
Well, respectfully, Your Honor, for the finality analysis, it's legal effect.

[00:31:37] Speaker 06:
And we don't think that there is any.

[00:31:38] Speaker 06:
But even for the legislative versus interpretive rule, the way that the court has framed it.

[00:31:43] Speaker 05:
Which I've been focusing on, I'm sorry.

[00:31:44] Speaker 06:
Correct.

[00:31:44] Speaker 06:
The way the court has framed it is whether what the agency has done could even fairly be described as an exercise in interpretation.

[00:31:52] Speaker 06:
So the fact that you're going from broad to specific does not make it a legislative rule.

[00:31:56] Speaker 06:
The only question is, not even is the agency right, just

[00:31:59] Speaker 06:
could you reasonably say that what the agency has done is tried to exercise its interpretive and party because of it?

[00:32:06] Speaker 05:
But that sounds like saying

[00:32:08] Speaker 05:
comment, would this be upheld as a reasonable interpretation given Shablon's opinion?

[00:32:14] Speaker 06:
Not at all, Your Honor.

[00:32:14] Speaker 06:
In fact, this Court has been very clear that the question is not whether a review in court would uphold the agency's actions.

[00:32:20] Speaker 06:
Rather, it just could fairly describe what the agency has done be an exercise in interpretation.

[00:32:25] Speaker 06:
Maybe someone would say it's arbitrary and capricious.

[00:32:27] Speaker 06:
Maybe someone would say it's outside what the statute reasonably permits.

[00:32:31] Speaker 06:
But that's not the inquiry.

[00:32:32] Speaker 06:
And indeed, if you go back to this Court's decision in the American mining Congress case and the cases that interpret it,

[00:32:38] Speaker 05:
What the court is saying, at the end of the day, we're really- There's more factors there, correct?

[00:32:42] Speaker 05:
There are those more- That's correct.

[00:32:44] Speaker 05:
Two of which are completely within the control of the agency, at least two.

[00:32:49] Speaker 05:
To say, well, we just mean this as guidance, and we're not going to put it in the CFR.

[00:32:54] Speaker 05:
Sure.

[00:32:54] Speaker 05:
Right?

[00:32:55] Speaker 05:
I mean, that's just self-serving.

[00:32:57] Speaker 05:
We can't give that much, if any, credit to that.

[00:33:01] Speaker 05:
I can see if you did put it in the CFR, it would hurt your case, but you know, you'd have to be crazy to do that.

[00:33:07] Speaker 06:
I mean, I think your honor is right that some of those factors tend not to be relevant in a lot of these cases.

[00:33:13] Speaker 06:
But at the end of the day, what the court is really trying to figure out, and this is what the American Mining Congress Court said, this is what courts interpreting that decision and applying it have said, is really we're trying to figure out, is the agency creating something of legal effect that hadn't been there before?

[00:33:30] Speaker 06:
But is it doing something?

[00:33:32] Speaker 06:
Is it creating something such that what the agency has done is itself binding the party or creating legal effect versus the thing that the agency is interpreting?

[00:33:41] Speaker 05:
Is it relevant when the city says, we feel bound?

[00:33:45] Speaker 06:
Well, first of all, Your Honor, actually, what the city told the Northern District of Texas in its complaint was after getting the first letter,

[00:33:51] Speaker 06:
It didn't think the agency had issued any binding guidance.

[00:33:54] Speaker 06:
It told the district court in Texas that it asked the city for, it asked DOT for further information because it wanted, quote, a mandate and not mere guidance.

[00:34:04] Speaker 06:
So the city certainly understood.

[00:34:05] Speaker 05:
Because it doesn't want to run foul of a standard that could then preclude it from collecting facility fees and getting grants and so on.

[00:34:12] Speaker 06:
Well, respectfully, Your Honor, when the city... when DOT issues a notice of investigation, which it has done in this case and commenced further proceedings, it has not cut off the city's funds.

[00:34:22] Speaker 05:
The city continues to receive... The stakes are very large for the city, so it feels compelled...

[00:34:28] Speaker 05:
to err on the side of caution, could seek more assurance to do anything rather than jeopardize that.

[00:34:35] Speaker 06:
And I'm sure just like the holistic Kamler manufacturers felt like they didn't want to deal with an FDA enforcement action and tons of potential penalties imposed by the FDA, or that any other regulated entity that is threatened by an agency warning letter feels that it may have a choice between...

[00:34:52] Speaker 03:
All right, because I thought there's a lot of overlap between the question of finality and the question of legislative versus interpretive.

[00:34:58] Speaker 06:
Certainly, this court's case law has a lot of overlap.

[00:35:01] Speaker 03:
Absolutely.

[00:35:01] Speaker 03:
But on the question of finality, even if it's artificial, if we segregate them for a second, on the question of finality, I thought there are cases that stand for the proposition that practical effects, including the practical response by a party, isn't enough, that it's legal consequence that matters.

[00:35:17] Speaker 03:
That's exactly right.

[00:35:18] Speaker 06:
We're looking at legal consequences.

[00:35:20] Speaker 03:
for purposes of finality.

[00:35:21] Speaker 03:
But then when we look at interpretive versus legislative, I don't think it's that clean.

[00:35:26] Speaker 03:
Or is it?

[00:35:27] Speaker 06:
There's no question that this court has described its own case law as a little bit murky in this area.

[00:35:32] Speaker 06:
But at the end of the day, what the American Mining Congress court said and what courts applying that decision have said is really what we're trying to discern through all these factors and all this complicated analysis is what the agency has done.

[00:35:44] Speaker 06:
Is it legal effect?

[00:35:45] Speaker 06:
And just to kind of broaden the perspective for a moment,

[00:35:49] Speaker 06:
If the agency had wanted to rely on the letters and say to the city of Dallas, hey, you violated the letters, then the agency would be issuing an interpretive rule, sorry, a legislative rule, but that's not what's going on here.

[00:36:00] Speaker 06:
The city of Dallas approached the agency and said, we want to know what's going on.

[00:36:05] Speaker 06:
on a rather compressed time frame, the agency sent them a letter to say, okay, well, here's our views.

[00:36:10] Speaker 06:
Take it for what you will.

[00:36:11] Speaker 06:
And then at that point, after the city continued to not make a decision on the accommodation, when the agency issued its notice of investigation, it didn't say, okay, we're investigating your failure to comply with the letters.

[00:36:22] Speaker 06:
It said, we're investigating your failure to comply with the grant assurances.

[00:36:26] Speaker 06:
And that was what had legal effect all along, both before and after the letter.

[00:36:31] Speaker 03:
So when the – in the NOI, when the agency says the letter only offered guidance and was not intended to constitute a definitive resolution of the dispute, the way you started off your argument is to say that by nature this kind of instrument can never have legal consequence because the way the agency operates is to bring an action.

[00:36:51] Speaker 03:
I think that's exactly right.

[00:36:53] Speaker 03:
But that seems different from what that footnote is saying.

[00:36:56] Speaker 06:
Well, there's two separate issues here in the finale inquiry.

[00:36:59] Speaker 06:
One is whether it was the final consummation of the agency's decision, and one was whether it had legal consequences.

[00:37:04] Speaker 06:
We absolutely believe that at the time it was issued and still today, the letter did not have legal consequences.

[00:37:10] Speaker 03:
And your view on that is that the letter by nature could never have legal consequence.

[00:37:13] Speaker 03:
No matter what you do in a letter, you can be as definitive as you want to.

[00:37:17] Speaker 03:
But by nature, that type of letter can never have legal consequence because of the way the agency conducts it.

[00:37:23] Speaker 06:
That's right.

[00:37:25] Speaker 06:
Yes.

[00:37:26] Speaker 06:
But in any event, that's correct.

[00:37:30] Speaker 05:
How often do we say never?

[00:37:31] Speaker 06:
Well, I don't think the court needs to go that far in this case.

[00:37:34] Speaker 06:
But as a legal doctrinal matter, yes, that letter does not have legal effect.

[00:37:38] Speaker 03:
Then with respect to that footnote that I was quoting,

[00:37:41] Speaker 03:
Your view is that that footnote just doesn't treat with a legal consequence.

[00:37:45] Speaker 03:
What it's treating with is definitiveness.

[00:37:47] Speaker 06:
Correct.

[00:37:48] Speaker 03:
Which is the other prong.

[00:37:49] Speaker 06:
I think that's right.

[00:37:50] Speaker 06:
I mean, I think the court also could read that footnote as stating the obvious, which was that the agency had never intended that letter to have legal effect, because it can have legal effect.

[00:38:01] Speaker 06:
And so the footnote certainly is.

[00:38:02] Speaker 03:
That's what I'm wondering is, how do you read it?

[00:38:03] Speaker 03:
Because that's one way to look at it.

[00:38:05] Speaker 03:
But they seem to be doing too.

[00:38:06] Speaker 03:
They get you to the same place.

[00:38:08] Speaker 03:
Right.

[00:38:08] Speaker 03:
But there seems to be too.

[00:38:11] Speaker 03:
ways of looking at that that go to different prongs of the finality and else.

[00:38:15] Speaker 06:
Well, I mean, I think if you read the letter, the NOI as a whole, both that sentence as well as the fact that the agency is talking about how the city will be afforded a full opportunity to raise all its arguments about the letters, they do go to both issues.

[00:38:30] Speaker 06:
I think because the letter didn't have legal effect at the time it was issued,

[00:38:35] Speaker 06:
maybe less clarification was needed in the NOI as to that issue.

[00:38:40] Speaker 06:
And so to the extent that there may have been more ambiguity in the case, perhaps there was more ambiguity as to whether the letter at the time it was issued was definitive.

[00:38:49] Speaker 03:
And so, you know, in terms of- And you're saying definitive is the same thing as final consummation?

[00:38:54] Speaker 03:
Correct.

[00:38:55] Speaker 06:
Exactly.

[00:38:56] Speaker 06:
That first part of the final agency action test.

[00:38:58] Speaker 06:
But you can certainly read that footnote and the later language about the full opportunity is being addressed to both issues.

[00:39:07] Speaker 06:
There are no further questions.

[00:39:09] Speaker 03:
Thank you.

[00:39:21] Speaker 01:
May please the court, Jeffrey Harris on behalf of Delta.

[00:39:23] Speaker 01:
Just two quick notes on final agency action.

[00:39:26] Speaker 01:
So Southwest in its reply brief and at the podium suggested that it might not actually have an opportunity in the part 16 to raise this issue.

[00:39:33] Speaker 01:
So on December 23rd, they filed a 50 page brief and there's a heading that says,

[00:39:38] Speaker 01:
the positions in the DOT letters regarding permanent forced accommodation and use of snapshot dates have no legal support and cannot be followed by FAA.

[00:39:46] Speaker 01:
That's a refiled in what?

[00:39:48] Speaker 01:
This was filed before the FAA in the Part 16.

[00:39:51] Speaker 01:
Not in the district order.

[00:39:52] Speaker 01:
That's right.

[00:39:53] Speaker 01:
So the hearing officer specifically invited both Delta and Southwest to participate and both accepted that invitation.

[00:40:00] Speaker 01:
And Delta is not defending the letters per se, but is certainly saying that's a proper interpretation and Southwest disagrees.

[00:40:06] Speaker 01:
But one way or another,

[00:40:08] Speaker 01:
it'll be resolved in that proceeding.

[00:40:10] Speaker 03:
And I think- Is that found?

[00:40:11] Speaker 03:
Because I saw that somewhere there was a web address where you can supposedly go and find the files, but I didn't see it on there.

[00:40:17] Speaker 01:
We can put them in as supplemental authority if you'd like.

[00:40:20] Speaker 01:
It was a convoluted process, but they are online.

[00:40:23] Speaker ?:
Okay.

[00:40:23] Speaker 01:
And I think the part 16 is also important because I think it would be really odd for this court.

[00:40:30] Speaker 01:
The city is ultimately the regulated party, and it would be very anomalous for this court to pass on what's happening vis-a-vis the city when there's an ongoing regulatory proceeding where the city is actually a party.

[00:40:43] Speaker 01:
Because at the end of the day, it's the city's grant funds

[00:40:46] Speaker 01:
that are at stake.

[00:40:48] Speaker 01:
So I think the fact that the city is not here but is before the part 16 proceeding is just another reason for this court to stay its hand, both as a matter of judicial economy and is underscoring why there's no finality.

[00:41:01] Speaker 03:
I don't know.

[00:41:03] Speaker 03:
Sure.

[00:41:03] Speaker 03:
I'm sorry.

[00:41:04] Speaker 03:
I'm not sure if all the last part of that.

[00:41:05] Speaker 03:
I can understand the kind of practical point about the city being involved.

[00:41:09] Speaker 03:
But why?

[00:41:09] Speaker 03:
Why does it directly go to how we construed the finality requirement?

[00:41:12] Speaker 01:
Because that's the proceeding that will determine if the city actually violated its grant assurances.

[00:41:18] Speaker 01:
And if so, what the remedy would be

[00:41:20] Speaker 01:
So the fact that there will be no consequences for anyone, unless and until that process runs its course and the city is found to have violated, I think underscores the lack of finality.

[00:41:32] Speaker 05:
Let me just leave that there for a moment.

[00:41:35] Speaker 05:
So if the city receives this letter,

[00:41:37] Speaker 05:
And then it doesn't record it.

[00:41:40] Speaker 05:
It simply says, we're reading this letter.

[00:41:44] Speaker 05:
It tells us these accommodation arrangements have to be essentially permanent.

[00:41:50] Speaker 05:
And therefore, Southwest, if you're on notice with respect to your leases and so on, if there's an accommodation that's going to be permanent, that's not a legal consequence?

[00:42:06] Speaker 01:
Well, I think this court's cases are pretty clear that a private party can't turn something into final agency action just by voluntarily complying.

[00:42:14] Speaker 01:
And I think the reliable auto sprinklers case is extremely helpful on this, because there you had, it was a notice of, essentially a notice of violation, and then the agency said, this is what you need to do to voluntarily comply.

[00:42:28] Speaker 01:
The party came in and said the writing is on the wall.

[00:42:30] Speaker 01:
They obviously think we violated.

[00:42:32] Speaker 01:
They obviously want us to do this.

[00:42:33] Speaker 01:
But this court was pretty clear that because there was an administrative process, that that was not enough.

[00:42:39] Speaker 01:
And I think we actually have a backstop here.

[00:42:41] Speaker 01:
So 47111D is

[00:42:44] Speaker 01:
the provision that governs loss of federal funds for an airport.

[00:42:48] Speaker 01:
And I think that just absolutely guarantees that the city will not lose a nickel of its funds unless and until the Part 16 process runs its course with an option of review to this court.

[00:42:59] Speaker 01:
So this court is not losing its ability to review these issues at the end of the day.

[00:43:03] Speaker 03:
But that sounds like then the argument that the government's making, which is that by nature a letter like this can't have legal consequence because it takes an action like

[00:43:11] Speaker 03:
a subsequent action the government could bring to bring about a legal consequence.

[00:43:16] Speaker 03:
But then, as I understood your brief, you were making a different argument, because I thought that your brief says, well, if you look at the letter, it might be final, but then you look at something that happens later and it shows you that it's not final.

[00:43:26] Speaker 03:
But then this argument would say that letter could never be final.

[00:43:29] Speaker 01:
So it's a two-part test.

[00:43:30] Speaker 01:
I think what we were suggesting in the brief, it did look like the consummation of the decision-making process on part one, but then we said,

[00:43:37] Speaker 01:
A, that's no longer true in light of the Part 16, but B, even if it were the consummation of the decision-making process, there still wouldn't have legal consequences.

[00:43:45] Speaker 03:
So on the second prong, you think the letter, by nature, can never have the requisite legal consequence?

[00:43:50] Speaker 01:
Again, never say never, but in this case, when there is a backstop, it's hard to.

[00:43:54] Speaker 05:
The letter, looking at the timing.

[00:43:58] Speaker 05:
The December 14 letter, that's the right date, December 2014, leads Southwest to file this case.

[00:44:08] Speaker 05:
And then the subsequent documents to which you're pointing, including I think the June 2015 letter, follow after Southwest has filed the case.

[00:44:20] Speaker 05:
So you're putting entirely in the hands of the agency the ability postdoc to determine whether what it said initially should be treated just fine.

[00:44:32] Speaker 01:
which is exactly what this court has allowed.

[00:44:34] Speaker 01:
So in the National Mining Association case just in 2014, our case is actually easier than that.

[00:44:40] Speaker 01:
So in National Mining Association, the court looked at the subsequent history and just drew an inference from silence and said, there's no indication that the agency has sought to apply this in a binding manner.

[00:44:50] Speaker 01:
We can go a big step beyond that, because here, not only has the agency not sought to apply it in a binding manner, but has affirmatively disclaimed

[00:44:57] Speaker 01:
any attempt to apply it in a binding manner.

[00:44:59] Speaker 01:
So I think this court's precedent is clear that the subsequent history matters.

[00:45:03] Speaker 05:
And just one- And that the subsequent history means whatever the agency does after it does the challenged action.

[00:45:11] Speaker 01:
Yes.

[00:45:14] Speaker 01:
I see my time is up, unless there are any further questions?

[00:45:18] Speaker 05:
No.

[00:45:18] Speaker 05:
Just puts us on the grandstand, that's all.

[00:45:20] Speaker 05:
We're not on the field.

[00:45:23] Speaker 03:
Thank you.

[00:45:24] Speaker 03:
Thank you.

[00:45:28] Speaker 03:
Mr. Goldberg, we'll give you two minutes.

[00:45:30] Speaker 04:
Thank you.

[00:45:30] Speaker 04:
First of all, Judge Ginsburg, the case which we cited was American Library Association versus FCC 406 F3rd 689.

[00:45:40] Speaker 04:
At the very end of that case, the court basically says that the plenary power, that the

[00:45:52] Speaker 04:
The FCC argued – this is page 708 – that the commission has discretion to exercise broad authority over equipment used in connection with radio and wire transmissions.

[00:46:02] Speaker 04:
It's an extraordinary proposition, this Court said.

[00:46:05] Speaker 04:
The commission's position amounts to the bare suggestion that if it possesses plenary power to act within a given area simply because Congress has endowed it with some authority to act in that area,

[00:46:14] Speaker 04:
we categorically reject that suggestion.

[00:46:17] Speaker 04:
So we would say that would also apply here.

[00:46:20] Speaker 04:
I want to bring the court's attention to a case cited in our brief, which is CSI Aviation versus DOT.

[00:46:27] Speaker 04:
This was also against the DOT, and it was a case where the DOT had made a determination of very legal significance at the time, a charter

[00:46:36] Speaker 04:
was told you have to have a certificate as an air carrier in order to do a GSA contract.

[00:46:42] Speaker 04:
And this court found that that was a reviewable decision, even though the agency made the same kinds of arguments that they're making here.

[00:46:50] Speaker 04:
Yes, it's 637 F3rd 408.

[00:46:55] Speaker 04:
It's the CSI Aviation versus Department of Transportation.

[00:47:01] Speaker 04:
The DOT has, in that case, said they've imposed an immediate and significant burden on CSI, which was the contractor, who had to qualify as an air carrier.

[00:47:12] Speaker 04:
At the very least, this casts a cloud of uncertainty over the viability of their ongoing business.

[00:47:18] Speaker 04:
And it put the company into a painful choice between costly compliance and the risk of prosecution, basically, if it gets it wrong.

[00:47:26] Speaker 04:
Having thus flexed its regulatory muscle, DOT cannot evade judicial review.

[00:47:32] Speaker 04:
And it's a similar situation here.

[00:47:33] Speaker 04:
The DOT in that letter did flex their regulatory muscle, and they can't try to say, well, it was just guidance or it didn't really count.

[00:47:41] Speaker 05:
OK, but the directive was to the

[00:47:44] Speaker 05:
Yes.

[00:47:45] Speaker 05:
Right, which actually makes it even more difficult for somebody like Southwest because we're not exactly what it does, but legally as well.

[00:48:00] Speaker 04:
Well, it makes it more difficult for us just to sit around and not do anything or challenge this type of legal directive because we can't control what the city ultimately will do.

[00:48:09] Speaker 04:
We can't, even though we are making submissions in the Part 16 case when we're allowed to, of course we're going to if somebody asks us to.

[00:48:16] Speaker 04:
It doesn't mean it's going to have any ramifications in the next several years.

[00:48:21] Speaker 05:
And you're already intervening in the district court case, are you not?

[00:48:24] Speaker 04:
We were a party.

[00:48:25] Speaker 04:
We were we were sued along with the others at the time, actually.

[00:48:29] Speaker 04:
Um again, an appellation power.

[00:48:31] Speaker 04:
This court said it's irrelevant that the guidance is subject to change again, as one could say the N. O. I might or might not have because the entire guidance reads like a U case.

[00:48:41] Speaker 04:
It commands.

[00:48:42] Speaker 04:
It requires an orders.

[00:48:43] Speaker 04:
It dictates, and that's the same situation here.

[00:48:46] Speaker 04:
It may change down the road, but right now it continues to command.

[00:48:49] Speaker 04:
The National Association McCarthy case is cited by, I think, both parties.

[00:48:54] Speaker 04:
And theirs is very different than this case, because the final guidance at issue was meaningless, as the EPA had noted.

[00:49:03] Speaker 04:
There was no legal impact.

[00:49:04] Speaker 04:
It didn't tell any regulated party what they must do or not do.

[00:49:08] Speaker 04:
Here we have the DOT letter, which does, in fact, tell the airport exactly what it should do or not do.

[00:49:15] Speaker 04:
I think that Council for Delta said that this was all about the city, and the city should be the one at issue.

[00:49:22] Speaker 04:
But no, it's about Southwest very much, too.

[00:49:24] Speaker 04:
They paid millions of dollars for these additional gates that they have to basically give for a nominal amount for infinatum time to Delta.

[00:49:33] Speaker 04:
So their lease rights are directly impacted, and the city is not the only person with an interest here.

[00:49:39] Speaker 04:
Finally, I just want to make clear on the record, it may or may not be in the materials you have.

[00:49:44] Speaker 04:
I know it was, I believe, in the

[00:49:45] Speaker 04:
in the materials of the district court action, but there was a letter from Delta Council on February 23rd, 2015 that said, while Southwest is free to challenge DOTs in the city's decision, as it has done so by filing its petition, unless and until the city or DOT's position

[00:50:04] Speaker 04:
is legally overturned, we respectfully submit that the DOT letter is binding and sets forth a clear path for resolution of this long-standing dispute.

[00:50:12] Speaker 04:
So Delta has been all over the map on this, and even in their own brief, as Your Honor noted, they say, well, if you just look at that letter, it does look like a final order.

[00:50:22] Speaker 04:
And in fact, that's what we see.

[00:50:22] Speaker 03:
Sounds like both Delta and Southwest have filed things on one hand that say it's final, and on another thing that says it's not final in various proceedings.

[00:50:28] Speaker 04:
And if it's not final, it's not final.

[00:50:30] Speaker 04:
We don't have a problem with our 60-day issue.

[00:50:32] Speaker 04:
And nobody's going to come and say, well, the DOT issued a letter on this.

[00:50:35] Speaker 04:
You can't challenge it.

[00:50:36] Speaker 04:
But until that day happens, we have to assume the worst.

[00:50:39] Speaker 04:
And the worst is we've got a letter that's live out there.

[00:50:42] Speaker 04:
And if it's a non-event, it's a non-event.

[00:50:44] Speaker 04:
At this point, we have to be concerned.

[00:50:46] Speaker 05:
Everything you've said on the bottle has gone to finale.

[00:50:51] Speaker 05:
It may bear later on legislative versus interpretive.

[00:50:54] Speaker 05:
But you've been presenting this all to show legal finale.

[00:50:57] Speaker 04:
Well, actually, the first thing, Your Honor, was the FCC case we had talked about before, and that, I think, was in connection with interpretation.

[00:51:03] Speaker 04:
Right, that aside.

[00:51:05] Speaker 05:
Yep.

[00:51:05] Speaker 05:
So when you say the letters to the city with the effect is on Southwest lease rights, there's no legal burden on Southwest lease rights, right?

[00:51:15] Speaker 05:
You said the value of them is diminished by the uncertainty about what they'll amount to when all proceedings are over.

[00:51:24] Speaker 04:
Well, as we sit here today, the bundle of rights that Southwest has or summer is reduced somewhat because of this letter that the Southwest ability to exercise its lease rights in Love Field for 18 gates is now impacted by the existence of this letter.

[00:51:40] Speaker 04:
If they wanted to do a transaction with somebody, it would clearly have an impact.

[00:51:44] Speaker 05:
Right now, there's five flights.

[00:51:47] Speaker 05:
There's a lesser value.

[00:51:49] Speaker 05:
Every other term of the transaction to the third party concerning these gains would be unaffected, except the price.

[00:51:58] Speaker 04:
I don't know that there could be a transaction if they wanted one because of this stain on the lease rights.

[00:52:03] Speaker 04:
As a practical matter, of course, Southwest is not able to use five flights a day, which they desperately want to use and intended to use.

[00:52:11] Speaker 04:
And that's money that the Southwest is not getting.

[00:52:14] Speaker 04:
So it has a real-world impact.

[00:52:16] Speaker 04:
And we believe that this letter is vacated.

[00:52:19] Speaker 04:
Yes, maybe we have to deal with the June 15 letter.

[00:52:21] Speaker 04:
Maybe it depends on what you guys do.

[00:52:23] Speaker 04:
But we take it one step at a time.

[00:52:25] Speaker 04:
Getting this letter vacated would be very important to Southwest being able to fully exercise its lease rights in Longfield.

[00:52:34] Speaker 03:
Thank you.

[00:52:35] Speaker 03:
Thank you.

[00:52:35] Speaker 03:
Case is submitted.