[00:00:00] Speaker 00:
Case number 25-1002 Frontier Airlines, Inc.

[00:00:04] Speaker 00:
Petitioner versus United States Department of Transportation.

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Mr. Scherr for the petitioner.

[00:00:10] Speaker 00:
Mr. Brewer for the respondent.

[00:00:12] Speaker 00:
Mr. Dvardsky for the intervener.

[00:00:14] Speaker 06:
Good morning, counsel.

[00:00:15] Speaker 06:
Mr. Scherr, please proceed when you're ready.

[00:00:18] Speaker 02:
Thank you, Your Honor.

[00:00:22] Speaker 02:
Good morning and may it please the court.

[00:00:24] Speaker 02:
Aaron Scherr on behalf of Petitioner Frontier Airlines.

[00:00:28] Speaker 02:
Under the plain language of the statute and regulations, which no party claims is ambiguous, Frontier is eligible for the slot exemptions made available to limited incumbents in FAA 2024 and Alaska is not.

[00:00:43] Speaker 02:
Frontier qualifies as a limited incumbent for two main reasons.

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The first is that it holds or operates fewer than 40 slots.

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That is the definition of a limited incumbent.

[00:00:54] Speaker 04:
But you have Congress distinguishing with three categories, zero slots, those between 1 to 39, and then 40 or more.

[00:01:04] Speaker 02:
I would agree that Congress distinguished between three categories.

[00:01:06] Speaker 02:
I wouldn't agree that they distinguish it exactly that way.

[00:01:09] Speaker 02:
I think what Congress did is it has a new entrant, limited incumbent, and then non-limited incumbent.

[00:01:15] Speaker 02:
What Congress did is, in only the limited incumbent definition, did it exclude slot exemptions from the term slot.

[00:01:25] Speaker 02:
Now, under the negative implication doctrine, we know that the adjacent definition of new entrant, it did not mean to exclude slot exemptions from the term slot.

[00:01:33] Speaker 02:
And what that does actually is it accomplishes three really important and logical policy goals here.

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And the first is that it aligns carriers in the categories that make sense.

[00:01:44] Speaker 02:
Our reading, which is just as I explained, says that a carrier who is not new to an airport, who has already entered an airport, or in Frontier's case has been there nonstop for 25 years, could in no way be a new entrant at the airport.

[00:01:58] Speaker 02:
Rather, it's a carrier who has been engaged in air transportation at that airport, which is how DOT has defined incumbent.

[00:02:06] Speaker 02:
It has been there in a limited capacity for 25 years.

[00:02:09] Speaker 02:
And it is, therefore, a limited incumbent.

[00:02:12] Speaker 06:
So this case involves just trying to diagram all the Venn diagrams and how they interrelate.

[00:02:19] Speaker 06:
That's exactly right.

[00:02:20] Speaker 06:
And this is, I think, meant to be not a hostile question.

[00:02:26] Speaker 06:
I don't think I follow why you expend as much energy as you do trying to make the point you just did, which is that frontier is not a new entrant.

[00:02:39] Speaker 06:
I take it that's the point you're making and you're saying if you look at the new entrant,

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definition under the statute.

[00:02:44] Speaker 06:
It says does not hold a slot, but by negative implication.

[00:02:47] Speaker 06:
It's OK to say that does not hold a slot or a slot exemption is the way we should read that, because slot exemption is actually singled out for specific treatment under limited incumbent.

[00:02:56] Speaker 06:
You don't have to give it the same treatment for no entrant.

[00:03:01] Speaker 06:
Suppose I disagree with you on that, and suppose I know you'll resist that.

[00:03:04] Speaker 06:
But suppose I'm more persuaded that slot just means slot, and Congress made pretty clear that

[00:03:12] Speaker 06:
where it wants slot exemptions to be slots.

[00:03:14] Speaker 06:
It says so, but otherwise, littered throughout the code and the regulations is a distinction between the two.

[00:03:19] Speaker 06:
And so the new entrant carrier literally means if you don't hold a slot, you're a new entrant.

[00:03:26] Speaker 06:
Then I'm not quite sure I follow why that matters for your purposes, because even if you are a new entrant,

[00:03:34] Speaker 06:
you can still be a limited incumbent, as I understand it, because that's just what the statute says.

[00:03:39] Speaker 06:
It says the new entrants, not only can you, but the statute prescribes that every limited incumbent is a new entrant.

[00:03:48] Speaker 06:
So I'm not understanding why you, and you can explain to me why you care as much as you do, but I don't understand why you care as much about whether you're a new entrant, because what matters to you is whether you're a limited incumbent.

[00:04:00] Speaker 06:
And if you're a limited incumbent, you may well be a new entrant, but who cares?

[00:04:05] Speaker 02:
So that's precisely right, Your Honor, except for that last point.

[00:04:08] Speaker 02:
And this is, unfortunately, one of the Venn diagram tricks of this statute.

[00:04:11] Speaker 02:
And that's that every single limited incumbent is a new entrant by virtue of the new entrant, including all limited incumbents.

[00:04:18] Speaker 02:
But not all new entrants are limited incumbents.

[00:04:23] Speaker 06:
Sure.

[00:04:24] Speaker 06:
I understand that too.

[00:04:25] Speaker 06:
But why does that require you to say that you're not a new entrant?

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Because why can't you be a limited incumbent?

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and a new entrant.

[00:04:36] Speaker 06:
But there still could be other new entrants who are not limited incumbents.

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It's just that they don't include you.

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And you have an example of one in your reply brief, which is a brand new airline.

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Or under the regulations, as I understand it, if you're an airline who only has international slots.

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There are other carriers.

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It doesn't have to be you.

[00:04:58] Speaker 06:
But there could be other carriers who are new entrants but are not limited incumbents.

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even if you're both a limited incumbent and a new entrant.

[00:05:08] Speaker 02:
Right.

[00:05:08] Speaker 02:
I understand the question better.

[00:05:09] Speaker 02:
I'm sorry about that.

[00:05:11] Speaker 02:
I think you're exactly right.

[00:05:12] Speaker 02:
I think there is a way to read the statute where a carrier could independently qualify as a new entrant and as a limited incumbent, which according to the reading you just report, that would be Frontier in this case.

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And if that were so, then Frontier would be eligible for the slot exemptions made available in FAA 2024.

[00:05:33] Speaker 02:
The reason we put forth our reading is what it does is it makes sure that carriers qualify for only one of the categories, right?

[00:05:39] Speaker 02:
It doesn't add an overlap to the statute that Congress.

[00:05:43] Speaker 06:
Why are you trying to do that?

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I know we'll hear from all counsel about this.

[00:05:48] Speaker 06:
But just speaking for myself, I don't understand the moral imperative to do that, because the statute already says on its face that there's an overlap.

[00:05:57] Speaker 06:
So we already know that they're not mutually exclusive categories.

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We already know that there's an overlap.

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And we're only talking about the extent of the overlap.

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And for your purposes, it seems like you could.

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Now, I'm not saying you necessarily win on this.

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But I'm just saying, conceptually, it could be the case that you give up on your argument that you're not a new entrant, and you just say,

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Well, actually, fine.

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I'm a new entrant, but I'm also a limited incumbent.

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And my argument doesn't mean that there's no such thing as a new entrant who's not a limited incumbent, because there are new entrants who are not limited incumbents.

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I'm just not one of them.

[00:06:29] Speaker 02:
I think that's right, your honor.

[00:06:31] Speaker 02:
And what that does, what that reading does is it naturally categorizes the carriers as Congress, the statute, the regulation intended, which is to put new entrants and limited incumbents on one side to say, these are the carriers that we are prioritizing, that we are giving favor to when we are trying to bring them into these airports, because these are the carriers that are going to add to competition,

[00:06:53] Speaker 02:
They're going to add the options.

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They're going to reduce airfare.

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And so it makes sense, you know, even as a new entrant definition says, hey, we should consider them together.

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As your honor says, sometimes, you know, you could independently qualify as both.

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It would make sense for that to happen, right?

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Because we consider those carriers as the priority carriers.

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Whereas on the other hand, which, which carriers are the priority carriers, the new entrants and the limited incumbents, because those are the ones that are going to accomplish the regulations and the statute goals.

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more competition, more options, reduced fares.

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Whereas on the other side, it puts non-limited incumbents.

[00:07:25] Speaker 05:
So in that view, how is it that Frontier meets the definition of a limited incumbent air carrier?

[00:07:32] Speaker 07:
Right.

[00:07:33] Speaker 05:
Because it's not enough to have zero slots, because every new entrant has zero slots.

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And your argument is that assuming that Frontier is a new entrant, that it also

[00:07:46] Speaker 02:
Because Frontier, as DOT itself recognized, is a carrier that is engaged in air transportation at DCA.

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It is an incumbent.

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And so therefore, it must be a type of incumbent that's recognized by the statute.

[00:08:00] Speaker 02:
And there are only two.

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You're either a limited incumbent or you're a non-limited incumbent.

[00:08:06] Speaker 02:
Because Frontier operates and holds fewer than 40 slots at DCA, it must be a limited incumbent.

[00:08:16] Speaker 06:
Now, that argument can't take you home if you buy what both DOT and Alaska say, which is that the best way to read the limited incumbent provisions, both the statute and the incorporated regulation, is that they mean fewer than 40 but at least one.

[00:08:32] Speaker 06:
Then you can't.

[00:08:33] Speaker 06:
Now, there's a debate about whether that's the best way to read it.

[00:08:36] Speaker 06:
But I think you have to concede that if that's the best way to read it, then even if we give you the benefit of the doubt on everything else, then you can't win.

[00:08:44] Speaker 02:
So not precisely.

[00:08:46] Speaker 02:
I mean, I think that's right.

[00:08:47] Speaker 02:
I think we could not qualify as a limited incumbent there.

[00:08:50] Speaker 02:
Then we go back to the issue that we believe that slot exemptions are by negative implication and by the express direction that we only exclude them from such sections that are within the limited incumbent category that we can't be a new entrant.

[00:09:04] Speaker 02:
And that puts us.

[00:09:05] Speaker 06:
I see.

[00:09:05] Speaker 06:
At that point, it becomes relevant, because then you say you have to be something.

[00:09:08] Speaker 02:
Have to be something.

[00:09:09] Speaker 06:
Yeah, OK.

[00:09:11] Speaker 06:
I see that.

[00:09:14] Speaker 02:
OK, go ahead.

[00:09:15] Speaker 02:
And I'll just say, because that's an argument that was raised by Alaska.

[00:09:18] Speaker 02:
I see that I'm passing my time.

[00:09:19] Speaker 02:
So that it's actually OK for Frontier to be nothing, right?

[00:09:24] Speaker 02:
It's OK for them not to qualify as a new entrant because, OK, conceding that slot exemptions are included there.

[00:09:29] Speaker 02:
But they also shouldn't qualify as a limited incumbent because fewer than 40 actually means between 1 and 39.

[00:09:35] Speaker 02:
It is hard to imagine a reading that is more inconsistent with the statute and its purpose, because that would only apply to carriers that only operate through slot exemptions.

[00:09:45] Speaker 02:
And what it would mean is that every time a new entrant got its first two slot exemptions, it would immediately fall into that definitional purgatory.

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never be eligible for another slot or slot exemption again because they don't qualify as anything.

[00:10:00] Speaker 02:
Those are precisely the types of carriers that Congress, that DOT are trying to prioritize when they're giving access.

[00:10:09] Speaker 02:
And on the other hand, that would leave us only with non-limited incumbents, precisely the carriers we are trying to move away from.

[00:10:15] Speaker 06:
Can I ask one question about that?

[00:10:18] Speaker 06:
Go ahead.

[00:10:19] Speaker 06:
And this is about why is it that

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the definition of limited incumbent carrier specifically provides that slot exemptions don't count slots.

[00:10:30] Speaker 06:
And I guess I could imagine one hypothetical on which that comes in a sharp relief, which is suppose you're an air carrier that has 35 slots and 10 slot exemptions.

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So if you count the slot exemptions, you go to 45 and you become non-limited.

[00:10:45] Speaker 06:
You don't count them.

[00:10:47] Speaker 06:
You're at 35, and you stay limited.

[00:10:50] Speaker 06:
So one way to understand the purpose of

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carving out slot exemptions from slots is to say, we want to make sure that that kind of air carrier isn't unfairly treated as a unlimited carrier.

[00:11:05] Speaker 06:
But they get to stay as a limited carrier on the assumption that that carrier would rather be a limited carrier than a non-limited carrier.

[00:11:13] Speaker 06:
That's a possibility.

[00:11:14] Speaker 06:
And maybe that's the way.

[00:11:16] Speaker 06:
But it might be something else.

[00:11:17] Speaker 06:
But I'm just a little confused because

[00:11:20] Speaker 06:
The purpose, the effect of having slot exemptions count as slots is then you're more likely to be deemed an unlimited carrier than a limited one.

[00:11:33] Speaker 06:
That's right.

[00:11:35] Speaker 06:
And why is it that slot exemptions are excluded from slots to make sure that a carrier is not treated as an unlimited carrier rather than a limited one?

[00:11:44] Speaker 02:
Sure, so I'll say the legislative history is not altogether clear on this, but what it does accomplish, it accomplishes three things, and I'll take your point first, is it makes traditional slots that line of demarcation between limited incumbents and non-limited incumbents.

[00:12:00] Speaker 02:
Again, between the incumbents or the carriers that we are trying to prioritize and the carriers that we're not trying to prioritize.

[00:12:08] Speaker 02:
And that makes intuitive sense with how the statute's framed, because you're saying if you have a significant number of traditional slots, that necessarily means that you are one of these legacy carriers that has had traditional access to the airport.

[00:12:21] Speaker 02:
And we're trying to move away from you when we're granting new slots and slot exemptions.

[00:12:26] Speaker 02:
Whereas if you are a carrier with a significant number of only slot exemptions, well, then you almost by necessity are one of these carriers who is adding more options, adding more competition, reducing airfare.

[00:12:37] Speaker 02:
newer to the airport, and those are the carriers we are trying to favor.

[00:12:41] Speaker 02:
So the amendment in 2012 that said we exclude it only from that category, that's the main thing that it accomplished there.

[00:12:48] Speaker 02:
The two other things I'll say briefly before I sit down, it also puts the carriers into categories that align with common sense and reality.

[00:12:55] Speaker 02:
This goes back to if you do include slot exemptions with new entrant, exclude it from limited incumbent.

[00:13:01] Speaker 02:
Carrier like Frontier, who's been at an airport for 25 years, is not new.

[00:13:05] Speaker 02:
It has already entered.

[00:13:07] Speaker 02:
This amendment makes sure that carriers who are actually new have not yet entered our new entrance.

[00:13:12] Speaker 02:
Carriers who are engaged in air transportation in a limited capacity beneath the threshold set by Congress are limited incumbents.

[00:13:20] Speaker 06:
But as I understand it, that explanation doesn't work if one were to think that you are a limited incumbent, but you're also a new entrant.

[00:13:29] Speaker 06:
I think that's right.

[00:13:30] Speaker 06:
Yeah, precisely.

[00:13:32] Speaker 06:
The explanation you just gave, I get it if you're treating them as mutually exclusive so that it would mean that you would say, we shouldn't be treated as a new entrant.

[00:13:41] Speaker 06:
That doesn't make any sense.

[00:13:42] Speaker 06:
But if the way I read the statute, or a possible reading of the statute, and I'm sure we'll get an explanation why this is not a possible reading of the statute.

[00:13:48] Speaker 06:
But a possible reading of the statute is you're both.

[00:13:51] Speaker 06:
In fact, you are a new entrant.

[00:13:52] Speaker 06:
And this whole argument you're just making about how we shouldn't be deemed a new entrant when we're already here, that falls out.

[00:13:58] Speaker 06:
whether you want to or not, you're a new entry.

[00:14:01] Speaker 02:
I think that's right.

[00:14:02] Speaker 02:
Taking your honor's point there.

[00:14:04] Speaker 02:
And so I think then the main policy goals is using traditional slots then as a way to demarcate the carriers we're trying to prioritize who have not had historic traditional slots and the carriers that were not trying to prioritize because they historically had a lot.

[00:14:18] Speaker 06:
And it goes back to the 35-10 hypo.

[00:14:19] Speaker 06:
So you would say if you have 35 slots and you have 10 slot exemptions,

[00:14:24] Speaker 06:
the way you'd think about it is, we still want to treat you as not a powerhouse.

[00:14:30] Speaker 06:
You're not a United.

[00:14:31] Speaker 02:
Yes.

[00:14:32] Speaker 02:
You are a carrier who is bringing new options, new competition, downward pressure on fares.

[00:14:37] Speaker 06:
Because even though you have 35 slots, you're still not, you don't have 100.

[00:14:41] Speaker 06:
Right.

[00:14:41] Speaker 06:
So you might get over the hump with the slot exemption.

[00:14:44] Speaker 06:
But the slot exemptions really are indicative of the kind of carrier you want to protect because they're introducing competition, even if you're at 35, 10.

[00:14:50] Speaker 06:
And so you're pretty close.

[00:14:51] Speaker 06:
Precisely.

[00:14:51] Speaker 06:
That's the way you think about it.

[00:14:53] Speaker 04:
Well, in 2012, DLT characterized Frontier as a limited incumbent carrier.

[00:14:58] Speaker 04:
Has there been any recharacterization of that since then?

[00:15:01] Speaker 02:
No, there hasn't, Your Honor.

[00:15:03] Speaker 02:
It actually, it did that twice, and Frontier brought that up in the proceedings, and DOT just simply ignored it.

[00:15:10] Speaker 02:
Now, agreeing, not quite sure what level of deference we give to that in the Loper-Bright universe, but certainly still, the agency's decision-making must be reasoned decision-making, and part of that is addressing unlike situations when it wants to come out differently.

[00:15:25] Speaker 02:
It came out exactly the opposite, and it did not address those decisions at all.

[00:15:32] Speaker 06:
There's no further questions.

[00:15:33] Speaker 06:
No questions for you at this time, and we'll give you a little time for the bottle.

[00:15:36] Speaker 06:
Thank you.

[00:15:39] Speaker 06:
Different government now.

[00:15:45] Speaker 01:
Thank you, Your Honor.

[00:15:45] Speaker 01:
May it please the court, Simon Brewer on behalf of the Department of Transportation.

[00:15:49] Speaker 01:
The department correctly disqualified Frontiers application because it qualifies only as a new entrant air carrier at Washington National Airport.

[00:15:57] Speaker 01:
That follows from the plain statutory language that, as Judge Child's question suggests, distinguishes between carriers with zero slots for new entrants, carriers with 1 to 39 slots who are limited incumbents, and carriers with 40 or more slots for non-limited incumbent carriers.

[00:16:14] Speaker 01:
Because it is uncontested that Frontier has zero slots at Washington National Airport, it qualifies only in the first category and was therefore ineligible for the slot exemptions at issue.

[00:16:24] Speaker 05:
I'm not sure that's necessarily the case.

[00:16:27] Speaker 05:
I mean, if we just read the plain text of the statute, 41714H4 treats slot exemptions as slots.

[00:16:38] Speaker 05:
So if that's the case, then

[00:16:44] Speaker 05:
Why would Congress have wanted to treat an airline that operated potentially many flights at DCA under slot exemptions as a new ent?

[00:16:54] Speaker 01:
Let me start with the definition, Your Honor, and then we can sort of broaden out from there.

[00:16:58] Speaker 01:
So as an initial matter, I don't think we can read that definition as defining slots to include slot exemptions.

[00:17:04] Speaker 01:
I think as first point, it would be exceedingly odd for a defined term to also include what is in the very name an exception to that defined term.

[00:17:13] Speaker 01:
And so I think instead what Congress was doing here was incorporating the regulatory definition of slot, which is the underlying regulatory regime on which the statutory language is built.

[00:17:23] Speaker 01:
I also think that reading the definition of slot to incorporate slot exemptions makes a hash of the rest of the statute.

[00:17:29] Speaker 01:
As the chief judge's question to my friend on the other side suggested, there are many places in the code that distinguish between slots and slot exemptions and use those terms in the same sense.

[00:17:39] Speaker 01:
And if the definition of slot by itself included slot exemptions already, it would be very difficult to understand why Congress felt the need to say slot and slot exemption in tandem elsewhere.

[00:17:50] Speaker 01:
For example, in section 41714K.

[00:17:51] Speaker 05:
And then finally, 41714K is just the one that disqualifies carriers with code share agreements from qualifying

[00:18:06] Speaker 05:
for slot exemptions as limited incumbents.

[00:18:10] Speaker 05:
So it's about qualifying for them, not about what you hold.

[00:18:14] Speaker 05:
It doesn't require.

[00:18:15] Speaker 05:
So I guess, I mean, if you go back to the definition in H4, it says the term slot means a reservation for an instrument flight rule takeoff or landing by an air carrier in air transportation.

[00:18:31] Speaker 05:
Now, a reservation for instrument flight will take off or landing by an air carrier of an aircraft and air transportation also describes a slot exemption does not functional entitlement.

[00:18:43] Speaker 01:
It functions, similarly, and yes, that it allows takeoffs and landings at the airport.

[00:18:48] Speaker 01:
But again, I think the last thing that I want to mention here is I think the statutory history is very helpful.

[00:18:52] Speaker 01:
So again, this definition very closely mirrors the underlying regulatory definition on which Congress was layering the slot exemption regime.

[00:19:01] Speaker 01:
So if you look at 14 CFR section 93.213A2, that's where the definition of slot originates and Congress was taking that language and importing it into the statute.

[00:19:12] Speaker 01:
But I think also, again, if Congress had intended to define slot to include slot exemption in that definition, it would be very difficult to understand the 2000 amendments, which added the limited incumbent definition.

[00:19:25] Speaker 01:
and said, for purposes of that definition, slot shall include slot exemption.

[00:19:29] Speaker 01:
Again, that language would be entirely redundant, superfluous, if the definition of slot already included slot exception.

[00:19:36] Speaker 05:
But wasn't it the case that before 2000, it was generally understood that slot exemptions were not treated as slots, and that that changed

[00:19:56] Speaker 05:
Not sure when that changed.

[00:19:57] Speaker 01:
By negative implications.

[00:19:59] Speaker 01:
So let me address that.

[00:20:00] Speaker 01:
So I think that's right.

[00:20:01] Speaker 01:
Before 2000, it was generally understood that slots did not include slot exceptions.

[00:20:05] Speaker 01:
And I think that makes sense of the statutory and regulatory definition of slot.

[00:20:10] Speaker 01:
From 2000 to 2012, Congress enacted a special exception, a deviation from that background understanding, and said, for purposes of the limited incumbent definition, slot will include slot exception.

[00:20:21] Speaker 01:
So that was an exception to the background rule.

[00:20:24] Speaker 01:
In 2012, Congress decided to eliminate that exception of the background rule and provided that even for the limited incumbent definition, slot would not include slot exemption.

[00:20:33] Speaker 01:
So that returned the statutory playing field to the way it existed before.

[00:20:38] Speaker 01:
Slots and slot exemptions would be treated as distinct categories under the statutory regime.

[00:20:43] Speaker 01:
And that's the world that we live in today.

[00:20:46] Speaker 06:
So I think, so let's just suppose at least, and I don't want to stop with the line of question.

[00:20:50] Speaker 06:
There's a follow-up.

[00:20:52] Speaker 06:
Go for it.

[00:20:53] Speaker 06:
But so let's suppose then that, for argument's sake, that we accept your reading that slot and slot exemption are different.

[00:21:04] Speaker 06:
And that even for this definition, you could just say, well, yeah, functionally, actually, the term slot, the way it's described actually covers the slot exemption.

[00:21:13] Speaker 06:
But the one thing we know is that it can't be a slot exemption because the statute draws a distinction.

[00:21:18] Speaker 06:
So we just read the definition to say the slot means a reservation.

[00:21:22] Speaker 06:
for a flight rule takeoff or landing, except by virtue of a slot exemption.

[00:21:28] Speaker 06:
Because we just know that the statute draws a distinction, so it has to carve that out.

[00:21:31] Speaker 06:
So let's suppose I'm with you on that.

[00:21:34] Speaker 06:
But why does that necessarily mean you're home?

[00:21:36] Speaker 06:
Because I still don't understand.

[00:21:40] Speaker 06:
That just means that Frontier is a new entrant.

[00:21:45] Speaker 06:
But they can be both a new entrant and a limited

[00:21:48] Speaker 06:
incumbent?

[00:21:49] Speaker 01:
No.

[00:21:50] Speaker 01:
Why not?

[00:21:51] Speaker 01:
Congress defined only a very particular overlap between those categories.

[00:21:55] Speaker 01:
And again, I think it's helpful to understand that this is building on the prior regulatory regime, which defined these categories.

[00:22:02] Speaker 06:
Well, I get that, that they defined a particular overlap.

[00:22:06] Speaker 06:
But then it just depends on what you start with.

[00:22:08] Speaker 06:
Because if they're a limited incumbent, they're definitely a new entrant.

[00:22:12] Speaker 06:
Correct.

[00:22:12] Speaker 06:
Right?

[00:22:13] Speaker 06:
So if I conclude the slot

[00:22:16] Speaker 06:
The point that slot exemptions aren't slots matters for understanding whether somebody is a new entrant other than by virtue of being a limited incumbent.

[00:22:26] Speaker 06:
There's two ways you can be a new entrant.

[00:22:28] Speaker 06:
One is you're a limited incumbent and therefore you're necessarily a new entrant.

[00:22:32] Speaker 06:
The other is you're a new entrant because you're an air carrier that doesn't hold slots.

[00:22:36] Speaker 01:
Correct.

[00:22:37] Speaker 01:
And so I think the problem with reading them to have a greater overlap is that it extends the overlap that Congress enacted.

[00:22:46] Speaker 01:
So Congress set up these three categories and it said in one particular circumstance, we will allow overlap, which is that someone who qualifies as a limited incumbent will also be permitted to be treated as a new entrant air carrier.

[00:22:58] Speaker 01:
but otherwise that these are conceptually distinct categories.

[00:23:01] Speaker 01:
And allowing the definitions to be read in a way that creates broader overlap frustrates Congress's intent that that one particular circumstance be the one where there is an overlap in these definitional categories.

[00:23:14] Speaker 06:
That seems, I don't understand why we have to do it that way.

[00:23:17] Speaker 06:
For one thing, if you start with whether they're a limited incumbent and you conclude that they are.

[00:23:23] Speaker 06:
So just say, I'm not even thinking about whether they're a new

[00:23:27] Speaker 06:
I'm just not looking at that part of the statute right now.

[00:23:29] Speaker 06:
I'm just going to start with the question that matters the most, whether they're a limited incumbent.

[00:23:33] Speaker 06:
Just looking at that provision, and let's just suppose I say, oh, they kind of, OK, I think they might qualify as limited.

[00:23:39] Speaker 06:
I mean, you yourself think they're incumbent.

[00:23:41] Speaker 06:
And then when I look to see whether they're a limited incumbent, I look to see, and I say, well, they have fewer than 40 slots.

[00:23:49] Speaker 06:
So they qualify.

[00:23:50] Speaker 06:
And I know you think, well, fewer than 40 slots means actually at least one.

[00:23:53] Speaker 06:
But let's just suppose I disagree with you on that.

[00:23:55] Speaker 06:
Let's suppose I think, actually, maybe, maybe not.

[00:23:57] Speaker 06:
I think different statutes and different regulations, I think both readings are plausible.

[00:24:01] Speaker 06:
If I ask, was your blood alcohol content less than 0.15, I think someone who has a zero qualifies.

[00:24:08] Speaker 06:
You don't have to have a blood alcohol content in order to ask whether your content was less than 0.15.

[00:24:13] Speaker 06:
Zero is good, actually.

[00:24:15] Speaker 06:
So I think that one is a wash.

[00:24:17] Speaker 06:
So I think, yeah, the frontier could be a little bit incumbent.

[00:24:20] Speaker 06:
And then by virtue of that, it's, no, but if we do that, then they're also a new entrant.

[00:24:24] Speaker 06:
And I think, OK, that doesn't matter, because the statute already tells me they're a new entrant because they're a limited incumbent.

[00:24:29] Speaker 06:
So then I'm not even expanding.

[00:24:30] Speaker 06:
Even if I bought your idea that it can only go so far, if I start with whether they're a limited incumbent and I think they qualify, then it doesn't matter that they're also a new entrant, because the statute compels that.

[00:24:40] Speaker 01:
But then there would be very little left of the new engine definition in that world, because all carriers that have zero slots would be limited incumbents.

[00:24:49] Speaker 01:
And then by that chain of logic.

[00:24:50] Speaker 06:
No, no, not all carrier, because you have to be an incumbent.

[00:24:53] Speaker 01:
So again, I think that we did use the term incumbent to say currently providing air transportation services at National Airport.

[00:25:00] Speaker 01:
But that's because that term standing alone was undefined.

[00:25:03] Speaker 01:
So the currently providing transportation at air services is not something my friend on the other side draws from the statutory or regulatory definition.

[00:25:11] Speaker 01:
Right, the statutory or regulatory definition is defined purely in terms of the number of slots held at the airport subject to the various carve-outs in the statute.

[00:25:19] Speaker 05:
You're saying the definition of incumbent?

[00:25:21] Speaker 01:
Right, so the definition of incumbent that the agency used, that was drawn from the plain language of the statute for that undefined term, incumbent air carrier.

[00:25:31] Speaker 06:
So let me ask you this.

[00:25:33] Speaker 06:
Suppose you have a carrier that has no slots or slot exempt at DCA.

[00:25:38] Speaker 06:
OK, are they a limited incumbent carrier?

[00:25:40] Speaker 06:
No, they would clearly be a new entrant.

[00:25:45] Speaker 06:
So they can't be a new entrant by virtue of being a limited incumbent carrier because they're not a limited incumbent carrier.

[00:25:50] Speaker 06:
Correct.

[00:25:50] Speaker 06:
Are they a new entrant?

[00:25:51] Speaker 06:
Yes, they would be a new entrant.

[00:25:53] Speaker 06:
So there's the example of a carrier who is a new entrant but is not a limited incumbent, even if Frontier is both a limited incumbent and a new entrant.

[00:26:05] Speaker 01:
Yes, but again, I think this is merging the categories very closely together.

[00:26:09] Speaker 01:
And when Congress has only provided for a very small overlap in those categories.

[00:26:13] Speaker 06:
Well, I don't understand why it's merging them very closely together.

[00:26:15] Speaker 06:
Because I've just given you a category, unless I'm missing something.

[00:26:18] Speaker 06:
I've just given you a category of carriers.

[00:26:21] Speaker 06:
But I think, imagine there's several carriers who are new entrants but are not limited incumbents.

[00:26:30] Speaker 01:
So maybe I can take a slightly different tack.

[00:26:32] Speaker 01:
I think that the world that Your Honor is positing is the world that existed between 2000 and 2012 when Congress decided to count slot exemptions towards the limited incumbent status.

[00:26:45] Speaker 01:
And so maybe a different way of getting to that question is if that's what Congress had intended, it could have left in place the regulatory regime

[00:26:51] Speaker 01:
that existed from 2000 to 2012.

[00:26:54] Speaker 01:
In that world, Frontier's slot exemptions counted as slots and counted towards its limited incumbency status during that period of time.

[00:27:02] Speaker 06:
I'm not basing it on the slot.

[00:27:06] Speaker 06:
I don't even think that the DOT, when they say that Frontier is an incumbent, it's true that they have a physical presence at the airport because of their slot exemptions.

[00:27:16] Speaker 06:
But it just happens to be because of the slot exemptions.

[00:27:19] Speaker 06:
The question is whether they're incumbent.

[00:27:22] Speaker 06:
And the point is, they are, because they're there.

[00:27:24] Speaker 06:
And so, yes, they count as an incumbent.

[00:27:27] Speaker 06:
And therefore, the question is, are they a limited incumbent?

[00:27:30] Speaker 06:
Do they have fewer than 40, or do they have more than 40?

[00:27:33] Speaker 06:
We don't count the slot exemptions to decide that, because if they had 41 slot exemptions, they would still be limited, even though they're over 40.

[00:27:39] Speaker 01:
So I guess I disagree with the premise of the question insofar as being an incumbent carrier leaves only two possibilities, that there be a limited incumbent or a non-limited

[00:27:48] Speaker 01:
Those are separate terms that Congress used in the statute.

[00:27:51] Speaker 01:
And if incumbent carrier only carried those two possibilities, then the statute would incorporate two entirely redundant qualification criteria.

[00:28:00] Speaker 01:
So when Congress set out the eligibility in terms of an incumbent air carrier qualifying for status as a limited incumbent air carrier,

[00:28:09] Speaker 01:
If Frontier were correct and the only possibility were limited incumbent or non-limited incumbent, there would be no reason to include that first phrase at all, incumbent carrier qualifying for status as.

[00:28:20] Speaker 01:
It would be sufficient.

[00:28:21] Speaker 01:
It would achieve exactly the same result to just say, these are reserved for a limited incumbent air carrier.

[00:28:26] Speaker 01:
And that's why DOT read the statute to include two separate qualification criteria for these slot exemptions at issue.

[00:28:35] Speaker 06:
First of all, you could be an incumbent carrier who's not a limited incumbent.

[00:28:39] Speaker 06:
because you're an unlimited incumbent carrier.

[00:28:41] Speaker 01:
And there was a separate set of eight-slot exemptions allocated for that category of people that also included that same particular phrase.

[00:28:48] Speaker 06:
But then it just, that seems like, I mean, I get your point as a matter of geometry, but boy, that's taking the kind of surplusage thing to an incredible degree to say Congress was so punctilious that

[00:29:02] Speaker 06:
every situation, they made sure that there was never any overlap.

[00:29:05] Speaker 06:
I mean, it just seems to me that what they could have been saying is there's two types of incumbent carriers.

[00:29:10] Speaker 06:
There are those who are limited and those who are unlimited.

[00:29:12] Speaker 06:
For those incumbent carriers who are unlimited, there are eight.

[00:29:17] Speaker 06:
slot exemptions available for those incumbent carriers who are limited.

[00:29:20] Speaker 06:
There are two slot exemptions available.

[00:29:21] Speaker 01:
But then there would be no reason to include that language.

[00:29:23] Speaker 01:
It would have achieved exactly the same effect if Congress had omitted those words.

[00:29:26] Speaker 06:
But the only words you're talking about omitting is to say those incumbent carriers who are limited.

[00:29:32] Speaker 06:
You're saying if they had just said limited incumbent carriers get two slots and non-limited incumbent carriers get eight, that would be one thing.

[00:29:41] Speaker 06:
And then what I'm saying would hold.

[00:29:42] Speaker 06:
And if I'm understanding correctly, what you're saying

[00:29:46] Speaker 06:
But wait, they didn't just say limited incumbent carriers get two and non-limited get eight.

[00:29:51] Speaker 06:
They said incumbent carriers who are limited incumbent carriers get two and incumbent carriers who are non-limited incumbent carriers get eight.

[00:29:58] Speaker 06:
You're drawing a great deal of significance into the fact that they would have added the first part of that, right?

[00:30:04] Speaker 06:
Am I understanding it right?

[00:30:05] Speaker 01:
That's right.

[00:30:05] Speaker 01:
I think there is significance that they added the first part of that.

[00:30:07] Speaker 01:
Again, I think Congress could have achieved that effect if it had wanted to simply by omitting that language.

[00:30:13] Speaker 01:
We disfavor statutory interpretations.

[00:30:16] Speaker 06:
Is that then where we wind up?

[00:30:17] Speaker 06:
Because this is very helpful, because then at least it's isolating the government's understanding of why the conceptual possibility that I'm outlining can't be right.

[00:30:28] Speaker 06:
If I don't agree with you, hypothetically, if I don't agree with you that fewer than 40 means somewhere between 1 and 40, and I think 0 can count as fewer than 40,

[00:30:43] Speaker 06:
And I think somebody like Frontier can't, therefore can be a new, I'm sorry, therefore someone like Frontier can be a limited incumbent because they have, they're an incumbent because they have a presence by your own argument.

[00:31:00] Speaker 06:
They have fewer than 40, i.e.

[00:31:02] Speaker 06:
zero of the things that matter.

[00:31:04] Speaker 06:
So they can be limited incumbent.

[00:31:07] Speaker 06:
And the fact that they're also a new entrant doesn't matter because the statute

[00:31:12] Speaker 06:
specifically accounts for that possibility.

[00:31:14] Speaker 06:
The one thing that stands in the way of that understanding is your point about the fact that Congress and the 24 act added the words incumbent carriers who are limited.

[00:31:24] Speaker 01:
So yes, I think that's an important part of the argument.

[00:31:27] Speaker 01:
And I think that is consistent with how the agency read the statute and its decision.

[00:31:31] Speaker 01:
I do want to push back on the idea that someone with zero is qualifying as fewer than 40.

[00:31:37] Speaker 01:
And as we said, that's certainly in some contexts a permissible linguistic interpretation.

[00:31:42] Speaker 01:
No doubt about that.

[00:31:42] Speaker 01:
And the blood alcohol content example you gave might well be one of them.

[00:31:46] Speaker 01:
But that makes significantly less sense when there is a separate category that is more naturally suited by its own terms.

[00:31:54] Speaker 01:
to someone with zero of the relevant qualities.

[00:31:56] Speaker 01:
And here, that's the new entry category.

[00:31:58] Speaker 05:
I'm not sure this is relevant at this exact moment, but it struck me as sort of unusual that you can actually be a limited incumbent air carrier if you don't currently have any slots, if you've had them in the past.

[00:32:13] Speaker 05:
Is that right?

[00:32:14] Speaker 01:
That you cannot be a limited incumbent?

[00:32:16] Speaker 05:
You can be.

[00:32:16] Speaker 01:
Yes, you can be a limited incumbent air carrier if you have given up your slots in the past.

[00:32:20] Speaker 01:
Correct.

[00:32:21] Speaker 05:
So you don't actually currently have anything.

[00:32:23] Speaker 01:
Correct.

[00:32:23] Speaker 06:
That's exactly right.

[00:32:30] Speaker 06:
So that's getting to, in some ways, to the spirit, the question about spirit.

[00:32:34] Speaker 06:
Correct.

[00:32:35] Speaker 06:
I don't want to slip past the well-taken arguments that both you and Alaska have made that we shouldn't think about the spirit arguments, because spirit could have intervened at a particular time, and it didn't.

[00:32:47] Speaker 06:
I understand those arguments.

[00:32:49] Speaker 06:
But just to get to the merits of it, for purposes of understanding holistically how the agency is thinking about the statute and the regulations.

[00:32:58] Speaker 06:
As Judge Pillard said, you can be a limited incumbent carrier even if you don't currently have any slots, because you could have been someone under the regulations who gave up your slot in your year way back when, right?

[00:33:11] Speaker 06:
Correct.

[00:33:11] Speaker 06:
You transferred it.

[00:33:12] Speaker 06:
Yes.

[00:33:13] Speaker 06:
And under the regulation itself, it says you're still a limited incumbent carrier in that situation.

[00:33:17] Speaker 06:
As I understand the agency's reasoning, someone in that position still might not be an incumbent carrier.

[00:33:24] Speaker 06:
That's exactly right.

[00:33:25] Speaker 06:
I have to say, I'm not quite sure I follow that.

[00:33:28] Speaker 06:
Because if the statute and regulations treat you as a limited incumbent carrier, how can you be a limited incumbent carrier but not an incumbent carrier?

[00:33:39] Speaker 01:
Again, I think that returns to the agency's understanding that Congress set forth two separate eligibility criteria.

[00:33:45] Speaker 01:
And in doing so, Congress used the incumbent in two slightly different ways.

[00:33:49] Speaker 06:
So on the first criterion, it used the same word in slightly different ways right next to each other.

[00:33:54] Speaker 01:
Yes, and I don't think that's surprising, because in one of them, Congress was using a defined term.

[00:33:59] Speaker 06:
When they said incumbent carrier, who is a limited incumbent carrier, we're supposed to understand that they meant the word incumbent to mean two different things when they said them right next to each other.

[00:34:07] Speaker 01:
Yeah, so I think it used the term incumbent air carrier, which is an undefined term, and therefore under well-established statutory interpretation principles, the agency gave that its plain language meaning, which is someone who currently occupies the specified office here providing air transportation,

[00:34:22] Speaker 01:
at the airport.

[00:34:24] Speaker 01:
And then it used a defined term, limited incumbent air carrier.

[00:34:27] Speaker 01:
And defined terms can incorporate exceptions.

[00:34:30] Speaker 01:
They certainly do here under the well-tread regulatory and statutory definition.

[00:34:36] Speaker 01:
And so the fact that Congress has chosen to not count some kinds of holdings under those definitions, and in doing so, provided for a very particular definition of limited incumbent air carrier,

[00:34:50] Speaker 06:
I don't think it's terribly surprising that the- Boy, I mean, there's a lot of challenging Venn diagram issues in this case.

[00:34:55] Speaker 01:
Yes.

[00:34:55] Speaker 06:
Something that doesn't seem completely challenging is the notion that there's a broader category of incumbent carrier, of which limited incumbent carrier, even by the very title of it, is a subset.

[00:35:08] Speaker 06:
Again, I think Congress- Do you think that that's not right?

[00:35:10] Speaker 01:
Yeah, Congress could have certainly defined it in that way.

[00:35:12] Speaker 01:
It didn't add a defined term of incumbent air carrier.

[00:35:15] Speaker 01:
That's not a term of art that has been used in the statute or the regulation previously.

[00:35:20] Speaker 01:
And so I think the agency did what it's supposed to do when it's confronted with an undefined statutory term, which is give it its plain language meaning.

[00:35:27] Speaker 04:
And so going back to that, OK, my original question was these three categories.

[00:35:34] Speaker 01:
Yes.

[00:35:34] Speaker 04:
Zero, the limited incumbent from 1 to 39, and then the non-limited incumbent from 40 or more.

[00:35:40] Speaker 04:
So that's making three distinctive categories.

[00:35:43] Speaker 04:
But then you go back to all of the questioning that's been going on, where it could mean that Frontier still could be a new entrant.

[00:35:50] Speaker 04:
and still be a limited incumbent?

[00:35:52] Speaker 04:
Are you taking the position that for purposes here, we need to fit within one of the categories and kind of put aside that you can be both because you do have limited incumbent and new entrants as zero slots separated here?

[00:36:08] Speaker 01:
Our argument is that Frontier qualifies only as a new entrant and does not meet the definition of a limited incumbent air carrier, and therefore doesn't fall into that narrowly defined overlap that Congress has permitted.

[00:36:19] Speaker 04:
Despite that the 2012 definition by DOT classified them.

[00:36:23] Speaker 01:
Yeah, so I'd be happy to talk about the two 2012 decisions, if that would be helpful.

[00:36:27] Speaker 01:
So the first one, the May 2012 decision, simply does not characterize Frontier as a limited incumbent air

[00:36:33] Speaker 01:
That's not correct.

[00:36:35] Speaker 01:
The agency reiterated Frontier's self-characterization as a limited incumbent air carrier, but in the analysis portion of that decision, it did not accept nor reject, but did not accept that characterization.

[00:36:48] Speaker 01:
The July 2012 decision does suggest that Frontier is a limited incumbent air carrier.

[00:36:55] Speaker 01:
I think that decision needs to be understood in its context where, again, Frontier had made that assertion to the agency and no party to that proceeding had challenged Frontier's self-characterization as a limited incumbent.

[00:37:07] Speaker 01:
And I think that made good sense because in the context of the 2012 proceeding, new entrants and limited incumbents were equally eligible for the slot exemptions at issue.

[00:37:16] Speaker 01:
So there was no particular reason for anyone in the proceeding nor for the agency to make any delineation between a new entrant and a limited incumbent air carrier.

[00:37:25] Speaker 01:
And in that context, I think it's almost like judicial dicta.

[00:37:28] Speaker 01:
It's not something that should be taken to bind the agency in future proceedings.

[00:37:32] Speaker 05:
You haven't talked about co-chairing at all.

[00:37:35] Speaker 01:
Yes.

[00:37:37] Speaker 05:
We, of course.

[00:37:38] Speaker 06:
There's something you want to jump in on.

[00:37:39] Speaker 06:
I also have a co-chairing bit.

[00:37:41] Speaker 06:
There's one question that you actually, that Judge Pillard helpfully introduced that I just want to tie a bow on and then go to co-chairing, if that's OK.

[00:37:48] Speaker 06:
So on this, I'll just call it the spirit set of issues, even though I take the point that it may be inappropriate to address some of these if spirit isn't appropriately in the case.

[00:37:58] Speaker 06:
You made the point in wrapping up a previously answered that.

[00:38:02] Speaker 06:
we should allow Congress to give ordinary, we should assume that Congress just wanted to give an ordinary meaning to incumbent.

[00:38:09] Speaker 06:
And so it just wasn't thinking about the stylized situation in which someone's treated as a limited incumbent, even though they have no ongoing physical presence because they sold off, because they transferred the slot.

[00:38:20] Speaker 06:
I take that point.

[00:38:21] Speaker 06:
But usually, I mean, the government's in here all the time making the argument that,

[00:38:25] Speaker 06:
when we're construing statutes, we take into account the regulatory backdrop and the statutory backdrop.

[00:38:29] Speaker 06:
And if you do that, then you're just, you're hit in the face with a regulation that says, carrier is a limited incumbent, even though they have no physical presence at the airport.

[00:38:40] Speaker 06:
That's just, that's indisputable, correct?

[00:38:43] Speaker 01:
Yes, I mean, that is definitely a possibility.

[00:38:45] Speaker 06:
It's a, well, I think it's compelled when you have a carrier

[00:38:51] Speaker 06:
who had a slot that's been transferred, that carrier by dint of the regulation is definitely a limited incumbent.

[00:38:59] Speaker 06:
Yes, that qualifies as a limited incumbent.

[00:39:02] Speaker 06:
So they qualify as a limited incumbent.

[00:39:04] Speaker 06:
So Congress would have written the term incumbent carrier in the statute knowing that such a carrier under the then existing regulatory backdrop is a limited incumbent carrier, but would still have thought that they're still not an incumbent carrier.

[00:39:21] Speaker 01:
Yes.

[00:39:22] Speaker 01:
And I think, again, the reason for that is because Congress set forth two eligibility criteria.

[00:39:27] Speaker 01:
You know, it incorporated the limited incumbent definition into the second one.

[00:39:30] Speaker 01:
And to give the first one some kind of non-redundant meaning, the agency had to imbue it with some kind of independent significance.

[00:39:38] Speaker 01:
And the way it does that is by, again, treating this as an undefined term in the statute that it's going to afford.

[00:39:43] Speaker 06:
So your view is that because of the way the statute is phrased,

[00:39:49] Speaker 06:
And I don't remember the exact wording of 2024, but the wording that says, just so we're on exactly the same wavelength.

[00:39:58] Speaker 01:
Yes.

[00:39:58] Speaker 01:
So Congress made the slot exemptions available to, quote, incumbent air carriers qualifying for status as a limited incumbent air carrier.

[00:40:08] Speaker 06:
So based on that formulation, we should conclude that Congress must have wanted

[00:40:18] Speaker 06:
there to be incumbent air carriers who are not.

[00:40:24] Speaker 06:
No, they must have wanted for there to be limited incumbent carriers who are not incumbent carriers.

[00:40:31] Speaker 01:
That's right.

[00:40:32] Speaker 01:
So those are two separate criteria.

[00:40:34] Speaker 01:
And again, I don't think that's true.

[00:40:36] Speaker 06:
I mean, you have to admit that that's quite

[00:40:39] Speaker 06:
Unless I'm missing something that seems like quite a conclusion, that Congress had to have thought that a limited incumbent is not an incumbent.

[00:40:47] Speaker 01:
I think it thought some limited incumbents would not necessarily meet the common English understanding of an incumbent.

[00:40:54] Speaker 06:
In other words, even though you're a limited incumbent, suppose I change limited incumbent, it seems to me to be a fair translation of limited incumbent to say incumbent who's limited.

[00:41:08] Speaker 01:
Uh, yes, I guess I don't, I don't see any significant, I mean, it could have chosen different words to define.

[00:41:14] Speaker 06:
That's true.

[00:41:16] Speaker 06:
Then the argument would be an incumbent who's limited is not an incumbent.

[00:41:21] Speaker 01:
I mean, I think this happens when there's defined terms that include exceptions, you know, and deviations.

[00:41:27] Speaker 06:
Am I right that that would be the consequence that if you think it's okay to treat a limited incumbent as an incumbent who's limited, we'd also think

[00:41:34] Speaker 06:
That means that an incumbent who's limited is not an extra.

[00:41:37] Speaker 01:
So I guess I would say, you know, again, Congress chose particular words here.

[00:41:40] Speaker 01:
It chose to use a defined term under the statute and it chose to use a non defined term.

[00:41:44] Speaker 01:
And the one other point I'd like to make is this is not a new formulation.

[00:41:48] Speaker 01:
So if you look at 41

[00:41:50] Speaker 01:
718G3, for example, Congress has used this incumbent air carriers qualifying for status as language before.

[00:41:59] Speaker 01:
And I think, again, if you thought that these were entirely redundant terms, it would be passing strange that Congress has repeatedly over the years chosen this formulation that, you know, again, in frontier's view, or sorry, rather in spirit's view, sort of collapses the two into one phrase that could be shortened with no change in the meaning of the statute.

[00:42:18] Speaker 05:
Come again, can you explain what you just said?

[00:42:22] Speaker 01:
Yes, so Congress has repeatedly used this phrase of incumbent carrier qualifying for status as and if that were truly meaningless language, it adds nothing to the statute.

[00:42:35] Speaker 01:
It just means that again, air carrier has to be a limited incumbent.

[00:42:40] Speaker 01:
and we could delete those words from the statute with no effect on the statute's meaning, it would be exceedingly strange that Congress has repeatedly used that language over the years to define the eligibility criteria for these slot charges.

[00:42:51] Speaker 05:
So you're saying that the going to the trouble of saying an incumbent carrier qualified for status as a limited incumbent air carrier, and this is central to your argument, carries the negative implication that there are limited incumbent air carriers

[00:43:08] Speaker 05:
who are not at all incumbent other than the category who are limited incumbent air carriers because they once held and don't currently hold slots.

[00:43:21] Speaker 01:
Right.

[00:43:21] Speaker 01:
So the category would be in your view.

[00:43:25] Speaker 01:
So yeah, it would be carriers that do not currently operate at the airport that are not providing air transportation.

[00:43:32] Speaker 05:
That is the only non incumbent

[00:43:37] Speaker 05:
subset that you're relying on of limited incumbent air carrier or that is one, but you're also.

[00:43:42] Speaker 01:
That's the one.

[00:43:45] Speaker 01:
That's the one the agency set forth in its decision, which is and that spirits position.

[00:43:51] Speaker 01:
And this is contrary to spirits position, which is your answer.

[00:43:54] Speaker 01:
Exactly right.

[00:43:55] Speaker 01:
So what the agency set forth is that to be an incumbent air carrier that undefined term under the plain meaning of those words, one must be currently providing air transportation services at the

[00:44:06] Speaker 06:
I know this is going to seem like it's beating a several times beaten object.

[00:44:14] Speaker 06:
But let me just make sure that I understand the implications of your argument.

[00:44:19] Speaker 06:
So I take your point that the statute says in several places, incumbent carriers qualifying for status as either non-limited or limited.

[00:44:27] Speaker 06:
Let's just use limited now.

[00:44:29] Speaker 06:
So suppose Congress writes a statute that says, those incumbent carriers qualifying for status as limited carriers shall have access to two slot exemptions.

[00:44:42] Speaker 06:
Those incumbent carriers qualifying for status as non-limited carriers shall have access to eight slot exemptions.

[00:44:52] Speaker 06:
Wouldn't it work perfectly well to say,

[00:44:55] Speaker 06:
Yeah, that means that every limited carrier is, every limited incumbent is an incumbent, every unlimited incumbent.

[00:45:05] Speaker 06:
is an incumbent.

[00:45:05] Speaker 06:
But that's just how Congress described.

[00:45:07] Speaker 01:
So there's, I think, a couple of linguistic differences in the statute your honor just described.

[00:45:11] Speaker 01:
So for one, using those as a descriptor suggests that it relates.

[00:45:15] Speaker 01:
Yeah, I added those.

[00:45:15] Speaker 01:
I'll give you that.

[00:45:16] Speaker 01:
I added those.

[00:45:17] Speaker 01:
So I think that's one reason.

[00:45:18] Speaker 06:
I'm reading a lot into adding those, but I take your point.

[00:45:20] Speaker 06:
That does add the word.

[00:45:21] Speaker 01:
But I think that the significance there is that Congress could have chosen different language to accomplish that.

[00:45:26] Speaker 01:
And again, it said it could have defined the universe of eligible carriers in different ways.

[00:45:31] Speaker 01:
And certainly, you know, again, just to reiterate, I think it would be the same thing if you even drop those.

[00:45:36] Speaker 06:
But anyways, I take your point that those adds, adds emphasis to that.

[00:45:39] Speaker 06:
But then what's your second point?

[00:45:40] Speaker 01:
And the second point is, again, you know, we would still strive to give some independent significance to every word that Congress has used in the statute.

[00:45:48] Speaker 06:
So in that hypothetical, you think I would still conclude that there have to be

[00:45:54] Speaker 06:
limited incumbents who are not incumbents.

[00:45:57] Speaker 01:
Again, I would have to look at the very particular wording of the statute, but yes, I think we would start from the presumption that Congress is intentional in choosing its language.

[00:46:06] Speaker 06:
Let me make sure there's no further.

[00:46:10] Speaker 06:
Okay, it's very, very helpful.

[00:46:12] Speaker 06:
Thank you.

[00:46:13] Speaker 06:
Thanks.

[00:46:27] Speaker 03:
Mr. Dvoretsky.

[00:46:30] Speaker 03:
Good morning, your honors.

[00:46:30] Speaker 03:
May it please the court, Shai Dvoretsky, on behalf of Alaska Airlines.

[00:46:34] Speaker 03:
I've spent a lot of time with Venn diagrams myself on this case.

[00:46:40] Speaker 03:
This is not a statute like, say, ERISA that you would describe as a comprehensive and reticulated scheme.

[00:46:47] Speaker 03:
It is hard to make the Venn diagrams work perfectly.

[00:46:50] Speaker 03:
And in part, that is a function of the nature of the statute and its history.

[00:46:54] Speaker 03:
This is a statute that came about through a series of ad hoc provisions that Congress passed when it wanted to create or to give additional slot exemptions to particular carriers.

[00:47:04] Speaker 03:
And so I think the focus here ought to be on what is the latest piece of that puzzle?

[00:47:10] Speaker 03:
What did Congress enact in 2024?

[00:47:13] Speaker 03:
And in 2024, Congress made slot exemptions available only to limited and non-limited incumbents, not to new entrants.

[00:47:22] Speaker 03:
So focusing on the question of what is a limited incumbent because frontier needs to be a limited incumbent in order to qualify for the slot exemptions that it wants.

[00:47:32] Speaker 03:
I think that tees up the question of whether fewer than 40 can include zero or whether that has to mean one through 39.

[00:47:41] Speaker 03:
I take your point, Chief Judge Trinibasan, that in the abstract, fewer than something might include zero, it might not.

[00:47:49] Speaker 03:
Here, there are contextual and contextual cues that tell us that fewer than 40 means 1 through 39.

[00:47:57] Speaker 03:
The first of those is the word incumbent.

[00:48:01] Speaker 03:
When we talk about a limited incumbent, a limited incumbent carrier, we're talking about a limited incumbent carrier as two slots.

[00:48:10] Speaker 03:
We are also talking about an operator, an airline that holds or operates fewer than 40 slots.

[00:48:18] Speaker 03:
It would not be natural to say that you hold or operate zero slots.

[00:48:24] Speaker 03:
If I said to you, I went to the supermarket and I came back holding fewer than 10 apples,

[00:48:30] Speaker 03:
You would be surprised if I opened my shopping bag and there were zero apples in there.

[00:48:34] Speaker 03:
That's an unnatural way to say I came back holding fewer than 10 apples if the supermarket was sold out of apples.

[00:48:41] Speaker 03:
And so the words, and likewise the word.

[00:48:45] Speaker 06:
I understand that.

[00:48:46] Speaker 06:
I guess it seems to me to depend on whether you were asked the question or whether you just volunteered it as the shopper.

[00:48:53] Speaker 06:
If you just asked the question, are you holding fewer than 10 and you had zero, I think your answer would just be yes.

[00:49:00] Speaker 03:
If I was asked, did I come back from the supermarket holding fewer than 10 apples?

[00:49:07] Speaker 03:
My answer to that in normal English would be, I didn't find any apples at the supermarket.

[00:49:11] Speaker 03:
I wouldn't say, yes, I'm holding fewer than 10.

[00:49:13] Speaker 03:
I would feel like that was a trick way to ask me that question.

[00:49:17] Speaker 03:
Did you find any apples at the supermarket?

[00:49:21] Speaker 03:
So the words hold or operate, I think, tell us that you must hold or operate something.

[00:49:26] Speaker 03:
It's an unnatural way to say you hold or operate nothing.

[00:49:29] Speaker 03:
As as to the word, remind me, hold the words, hold or operate.

[00:49:35] Speaker 03:
Or where this is in 14 CFR 93 to 13, which is the right, which is the regulatory provision that is incorporated into under a five.

[00:49:46] Speaker 03:
It's the one that substitutes 40.

[00:49:48] Speaker 03:
That's right.

[00:49:49] Speaker 06:
It's incorporated into the statutory definition and if we treat that as part of the statute and it says that holds or operates fewer than 40 and your submission is.

[00:50:01] Speaker 03:
If you have zero, you don't qualify and it would be an unnatural way to express having zero slots to say you hold or operate zero slots, especially when Congress has created this

[00:50:18] Speaker 03:
separate category, it's an additional category for new entrance, which is expressly geared towards an area, an air carrier that does not hold a slot, which is what Frontier is here.

[00:50:30] Speaker 06:
In terms of- I want to make sure I understand your linguistic point.

[00:50:34] Speaker 06:
If I ask the question to someone in Frontier's position, do you hold or operate fewer than 40 slots?

[00:50:41] Speaker 06:
You think Frontier's answer should be, and let's take as a given that they have zero slots.

[00:50:47] Speaker 06:
If I ask the question,

[00:50:49] Speaker 06:
Do you hold or operate fewer than 40 slots?

[00:50:52] Speaker 06:
The answer should be no.

[00:50:57] Speaker 03:
We do not hold or operate any slots would be the natural way to express that.

[00:51:01] Speaker 05:
But first, if you're answering Justice O'Connor and she says I first said yes, your first answer would be no under his hypothetical, right?

[00:51:10] Speaker 05:
Do you hold or operate fewer than 40 slots?

[00:51:12] Speaker 05:
No.

[00:51:13] Speaker 03:
Correct.

[00:51:13] Speaker 05:
Do you hold or operate none?

[00:51:15] Speaker 03:
Correct.

[00:51:16] Speaker 03:
Correct.

[00:51:17] Speaker 03:
And the additional force for that argument comes from the use of the word incumbent.

[00:51:23] Speaker 03:
We're talking about a limited incumbent carrier.

[00:51:26] Speaker 03:
The word incumbent is really serving as an adjective here.

[00:51:30] Speaker 03:
We're short-handing it as a noun, like a congressional incumbent, but really it's being used as an adjective to describe a limited incumbent carrier.

[00:51:37] Speaker 03:
What kind of carrier is it?

[00:51:38] Speaker 03:
It's an incumbent carrier.

[00:51:41] Speaker 03:
The adjective there is serving the function of saying,

[00:51:44] Speaker 03:
the carrier occupies a particular position, or again, hold something.

[00:51:49] Speaker 03:
And so not only do we have the words hold or operate in the statute, but we have the word incumbent that is doing the same kind of work, all suggesting that fewer than 40 means that you must have something.

[00:52:03] Speaker 03:
Now, Chief Judge Rene Voss, in terms of your questions to Mr. Brewer about whether the word incumbent means different things in the same provision,

[00:52:11] Speaker 03:
It doesn't mean different things.

[00:52:13] Speaker 03:
The word incumbent, again, it's serving as an adjective.

[00:52:15] Speaker 03:
We're talking about incumbent air carriers at DCA, and we're talking about limited incumbent carriers.

[00:52:24] Speaker 03:
It's giving meaning to those other terms.

[00:52:26] Speaker 03:
It is referring to those other terms.

[00:52:29] Speaker 03:
Incumbent air carrier at DCA, is this an air carrier that currently holds some position at DCA?

[00:52:36] Speaker 03:
Do you fly into or out of DCA?

[00:52:38] Speaker 03:
Incumbent limited incumbent carrier then draws in this other regulatory and statutory definition, and that's referring to incumbency with respect to slots.

[00:52:48] Speaker 03:
But the word incumbent means the same thing and is doing the same thing in both places.

[00:52:53] Speaker 03:
It's simply referring to different things to your status flying in and out of the airport in the first part of the test that Mr Brewer referred to and to limited incumbency status in the second part of the test.

[00:53:04] Speaker 06:
So the conclusion from that would be that you

[00:53:07] Speaker 06:
even though you're a limited incumbent, you're not an incumbent.

[00:53:11] Speaker 03:
There could be a scenario, right, where you are a limited incumbent, but not an incumbent.

[00:53:15] Speaker 03:
And the other thing to point out on that, and again, this goes back to being something of an unusual ad hoc sort of statute, limited incumbent carrier is defined in a strange way because it is defined as a carrier that either has slots now or had slots at any time since, I think it was 1985, since a particular point.

[00:53:36] Speaker 03:
And so it's simply a function of how Congress has oddly chosen to define limited incumbent carrier that you could end up in a situation with somebody who, yes, technically is a limited incumbent carrier because they had a slot that they got rid of back in 1986.

[00:53:50] Speaker 03:
But they haven't flown since then, so they are not an incumbent air carrier at DCA.

[00:53:55] Speaker 03:
And again, Congress in the test here created a two-part test.

[00:54:00] Speaker 03:
But again, to your questions earlier, Chief Justice Srinivasan, it's not a test that is anomalous because it's giving incumbent different meanings.

[00:54:08] Speaker 03:
It's incumbent simply has different reference in the two parts of the test.

[00:54:13] Speaker 06:
But you have to hypothesize a Congress who understood that under the regulations, I mean, if Congress is omniscient, if they truly understood everything, I think the Congress would have spelled it out even more if your understanding of the DOT's understanding is right, and would have made clear that even though it might strike you as a little bit odd that incumbent carrier

[00:54:31] Speaker 06:
is not a broader subset that necessarily encompasses limited incumbent carrier.

[00:54:36] Speaker 06:
We're going to treat it as that for these purposes.

[00:54:38] Speaker 06:
We're going to come up with a different term, a carrier with a presence.

[00:54:42] Speaker 06:
We're just going to come up with something just to avoid what strikes me at first blush as a somewhat anomalous that Congress necessarily meant to use incumbent carrier in a way that means not all limited incumbent.

[00:54:55] Speaker 06:
Even though the regulations say that somebody who used to have a slot and doesn't have a certain ongoing physical presence is a limited incumbent carrier.

[00:55:03] Speaker 03:
I'm not saying Congress couldn't have done a better job.

[00:55:06] Speaker 03:
This is, however.

[00:55:07] Speaker 05:
So you're saying limited incumbent air carrier, which can include an air carrier that had slots as of 1988 or at some point, but no longer has them, whereas incumbent air carrier, DCA, in your view, is an air carrier with a current presence.

[00:55:24] Speaker 03:
Well, because it says, at DCA, as of the date of enactment of the FAA Reauthorization Act of 2024.

[00:55:30] Speaker 06:
But I think under the regulations, if you say, are you a limited air carrier as of 2024, the answer is yes.

[00:55:40] Speaker 06:
You are a limited air carrier as of that date.

[00:55:42] Speaker 06:
Because you had the slots going back to 1985 or whatever.

[00:55:46] Speaker 06:
The date reference, I don't know how much work it does, because under the regulations, you're treated as a limited air carrier in 2024.

[00:55:54] Speaker 06:
Even though that the reason, I get that it's somewhat metaphysical in that you're being treated as that by reference to your having had a slot 20 years ago, no longer having.

[00:56:05] Speaker 06:
I think that's right.

[00:56:07] Speaker 05:
I'm just saying it can be read.

[00:56:08] Speaker 05:
The word incumbent as used in limited incumbent air carrier can be read to use incumbency differently from an incumbent air carrier at DCA.

[00:56:19] Speaker 05:
Because in your view, in the context of the statute, incumbent in the phrase, incumbent Eric Harry at DCA, means, I think what Chief Judiciary of Austin said, current presence.

[00:56:30] Speaker 05:
It means something different.

[00:56:31] Speaker 05:
It doesn't mean the same thing as because under LIAC, it could be someone who has no current presence as defined.

[00:56:39] Speaker 03:
I think that's right.

[00:56:40] Speaker 03:
And I also think there is nothing anomalous or differential about the meaning of incumbent

[00:56:47] Speaker 03:
In these two instances, I think incumbent is just referring to different things, but the word incumbent itself is consistently understood as far as the.

[00:56:55] Speaker 05:
i'm not sure that you said that they're they have different references in the two places they're not different meaning i'm not sure I see.

[00:57:04] Speaker 03:
fine distinction you're making sure well seem to have different meaning either way what the word incumbent looking at that in isolation it is describing a type of air carrier what type of air carriers describing it's describing an air carrier that occupies a particular

[00:57:17] Speaker 03:
position or place.

[00:57:19] Speaker 03:
That's the basic meaning of the word incumbent.

[00:57:21] Speaker 03:
Now, when we're looking at the first part of the test, what position or place are we asking about?

[00:57:28] Speaker 03:
Well, we're asking whether it's an incumbent carrier at DCA.

[00:57:32] Speaker 03:
Is it one that flies into or out of Reagan National Airport?

[00:57:36] Speaker 03:
When we're looking at the second part of the test, limited incumbent carrier, we're asking, does it occupy a position or place

[00:57:43] Speaker 03:
as the statute defines limited incumbent carrier, which is to say with respect to slots.

[00:57:48] Speaker 03:
That's what we get out of the CFR provision that is incorporated into H5.

[00:57:52] Speaker 03:
And so it's, yeah, sure.

[00:57:56] Speaker 03:
But, but limited incumbent carrier is defined specifically with respect to holding or operating slots.

[00:58:04] Speaker 03:
Incumbent air carrier is not a defined term within the statute.

[00:58:08] Speaker 03:
And that is best understood as simply being an air carrier

[00:58:12] Speaker 03:
that, again, using my ordinary English definition, holds or occupies a position or place, flying into or out of DCA.

[00:58:20] Speaker 05:
Now.

[00:58:21] Speaker 05:
Correct.

[00:58:21] Speaker 05:
That's an important thing for you.

[00:58:22] Speaker 05:
Correct.

[00:58:23] Speaker 05:
DCA now is one meaning of incumbent, and with respect to slots, ever after 1985, is the other.

[00:58:31] Speaker 03:
Correct.

[00:58:32] Speaker 03:
Because the 1985 piece is coming in through the statutory and regulatory definition of limited income.

[00:58:40] Speaker 03:
And I apologize.

[00:58:41] Speaker 03:
I'm not sure if it's 1985, but I think it's the mid-1980s.

[00:58:44] Speaker 05:
All right.

[00:58:44] Speaker 05:
Yeah, I think you might be right.

[00:58:48] Speaker 06:
Can I go back to where you started, which is how we understand holds or operates fewer than?

[00:58:55] Speaker 06:
Sure.

[00:58:56] Speaker 06:
Because I do think that everybody, as I understand the way the arguments shake out,

[00:59:00] Speaker 06:
All sides agree that if your understanding is right, then your side prevails and Frontier doesn't.

[00:59:09] Speaker 06:
Putting aside Frontier's argument that new entrant does not hold a slot means does not hold a slot or a slot exemption.

[00:59:18] Speaker 06:
Which I disagree with, but we can put that aside.

[00:59:19] Speaker 06:
Yes, yeah.

[00:59:20] Speaker 06:
And I'm just saying that for these purposes, I'm going to say we all disagree with that, even though I know Frontier doesn't want us to do that.

[00:59:25] Speaker 06:
But just for understanding, because I think everybody then agrees that then what we're down to

[00:59:29] Speaker 06:
whether fewer than 40 means zero or whether it means at least one.

[00:59:35] Speaker 06:
And just to understand linguistically where we are, I don't think operates is, just to strip it away, let's just take out or operates.

[00:59:45] Speaker 06:
And let's just talk about holds.

[00:59:48] Speaker 06:
Because I think that's where it seems like the point of emphasis is.

[00:59:51] Speaker 06:
So I do think it's both, but I'm happy to.

[00:59:54] Speaker 06:
OK, then let's do them separately, because it's an or.

[00:59:56] Speaker 06:
So we can just do them one at a time.

[00:59:59] Speaker 06:
An air carrier that holds zero slots.

[01:00:03] Speaker 06:
Let's just do holds for a second.

[01:00:05] Speaker 06:
That holds zero slots.

[01:00:06] Speaker 06:
The answer to whether that air carrier holds fewer than 40 is no.

[01:00:13] Speaker 03:
That under your.

[01:00:14] Speaker 03:
Correct, because the answer is you do not hold fewer than 40.

[01:00:17] Speaker 03:
You hold zero.

[01:00:18] Speaker 03:
But I know we're taking these terms in isolation.

[01:00:21] Speaker 03:
I do think it's important to remember, though, that holds, operates, and incumbent are all

[01:00:28] Speaker 03:
mutually reinforcing terms that suggest that you must hold something, you must operate something, you must be an incumbent occupying a position or place as to something and that something is slots.

[01:00:38] Speaker 03:
So we can look at each term individually, but I also think that the fact that you have the three of them together is just triple underscoring that this is not the blood alcohol example for the person at all.

[01:00:48] Speaker 06:
Yeah, because of the words holds, operates, and incumbent all in your view presuppose

[01:00:55] Speaker 03:
that you hold something, that your incumbent asked you something.

[01:00:57] Speaker 06:
That thing that you're asking about, slots.

[01:00:59] Speaker 03:
Correct.

[01:01:00] Speaker 03:
And the thing that you're asking about is slots, because that's what the whole definition of A5 and the regulatory definition of, sorry, H5, and the regulatory definition that it incorporates is talking about.

[01:01:14] Speaker 03:
It's talking about slots, and specifically not slot exemptions, just slots.

[01:01:24] Speaker 06:
Yeah.

[01:01:26] Speaker 06:
A police officer pulls over someone and asks, in trying to discern whether they've been drinking, are you holding fewer than five bottles of alcohol?

[01:01:40] Speaker 06:
I guess, we'll scratch that.

[01:01:41] Speaker 06:
It's just too contrived.

[01:01:44] Speaker 06:
OK.

[01:01:44] Speaker 06:
I think I understand the holds or operates.

[01:01:53] Speaker 05:
Did you have fewer than two drinks?

[01:01:56] Speaker 05:
No.

[01:01:57] Speaker 05:
Go ahead, no drinks.

[01:02:01] Speaker 03:
Right.

[01:02:02] Speaker 03:
That's one way to do it.

[01:02:03] Speaker 03:
Yeah, did you have fewer than two drinks?

[01:02:04] Speaker 03:
And the other point that I would make on this, and I don't want to drag us all the way into Venn diagrams, because as I started out by saying, I think there actually isn't going to be a satisfactory answer in this statute the way there might be under ERISA or the tax code or some other provision to make everything fit perfectly together.

[01:02:19] Speaker 03:
I do think that while Congress created some amount of overlap

[01:02:24] Speaker 03:
by making every limited incumbent a new entrant, it did not make, I'm sorry, yeah, the new entrant means a new entrant or a limited incumbent.

[01:02:36] Speaker 03:
That doesn't mean that the overlap goes entirely the other way.

[01:02:42] Speaker 03:
And Congress has separately in a number of places in this statute differentiated between new entrants and limited incumbents.

[01:02:52] Speaker 03:
It did so in the 2024 act when it made these slide exemptions available only to limited incumbents.

[01:02:57] Speaker 06:
I think that has to be, I think there's a lot of force to that proposition that the category of new entrants who are not limited incumbents can't be zero.

[01:03:07] Speaker 06:
That I think that's got to be right, that there must be some new entrants

[01:03:12] Speaker 06:
who are not limited incumbents.

[01:03:15] Speaker 06:
And I think that has to be right.

[01:03:19] Speaker 06:
But then Frontier could still be both limited incumbent and a new entrant while still leaving room for some new entrants who are not limited incumbents.

[01:03:28] Speaker 03:
I think the question is how much overlap you understand this statute to be created.

[01:03:33] Speaker 03:
It's not going to be perfect because Congress itself already created some overlap in this hodgepodge of a statute.

[01:03:39] Speaker 03:
But as a general way of reading statutes, we try to avoid creating overlap where we can.

[01:03:45] Speaker 03:
Frontier's interpretation would create more overlap than ours would, and unnecessarily so.

[01:03:51] Speaker 03:
And that is another contextual cue, along with holds, operates, incumbents, for why you shouldn't create that overlap.

[01:03:57] Speaker 03:
Fewer than 40 should mean 1 through 39, not 0.

[01:04:01] Speaker 03:
That's my only Venn diagram.

[01:04:02] Speaker 03:
Not that it's going to be perfect, but it's just another clue along with the others for why fewer than 40 has to mean one at least.

[01:04:12] Speaker 06:
Thank you.

[01:04:12] Speaker 06:
Unless there are further questions.

[01:04:14] Speaker 06:
Thank you.

[01:04:15] Speaker 06:
Thank you.

[01:04:15] Speaker 06:
To share, we'll give you, we've gone on for all, we'll give you three minutes for rebuttal.

[01:04:48] Speaker 02:
Thank you, Your Honors.

[01:04:50] Speaker 02:
I want to push back on the idea that our reading creates more of an overlap than their reading.

[01:04:55] Speaker 02:
And that's, of course, because under our reading, the new entrant definition is wholly separate from the limited incumbent definition.

[01:05:04] Speaker 02:
Now, I don't want to tread over grounds that Your Honor said where you can actually be both of those things.

[01:05:09] Speaker 02:
I think in that situation, there is more of an overlap.

[01:05:12] Speaker 02:
But under our reading,

[01:05:13] Speaker 02:
There is not.

[01:05:14] Speaker 02:
Those are wholly distinct things.

[01:05:16] Speaker 02:
Somebody who is actually new, who has not yet entered as a new entrant, somebody who has already engaged in air transportation at the airport, as long as they're fewer than 40 slots, they're a limited incumbent.

[01:05:27] Speaker 02:
Their reading requires that the court make at least two edits to the statute for frontiers eligibility.

[01:05:33] Speaker 02:
We haven't even talked about Alaska's eligibility yet, but for frontiers.

[01:05:36] Speaker 02:
And the first is that the court graphed that slot exemption exclusion from the limited incumbent definition into the new entrant definition, such that it doesn't count there.

[01:05:44] Speaker 02:
And second, that the court rewrite fewer than 40 to mean between 1 and 39, or at least 1.

[01:05:51] Speaker 02:
And that's not what the statute says, as we pointed out in our briefing.

[01:05:55] Speaker 02:
Congress, do you think?

[01:05:57] Speaker 04:
They rewrite fewer than 40, but there's not a precedent that this has been defined, that fewer than 40 is 0 or the other way.

[01:06:06] Speaker 02:
There is not a precedent in regards to this statute.

[01:06:09] Speaker 02:
I think, as we showed in our briefing, though, Congress, DOT, and other agencies know very well how to define a range of numbers that exclude 0 when that's its intention.

[01:06:20] Speaker 02:
It uses language such as greater than 0, at least 1, between 1 and some positive number.

[01:06:27] Speaker 02:
That's exactly how DOT and Alaska tried to rewrite the statute here, saying fewer than 40 actually means between 1 and 39.

[01:06:36] Speaker 02:
Congress and DOT knew how to use that language and chose not to hear.

[01:06:41] Speaker 02:
And I would say that there is precedent.

[01:06:43] Speaker 02:
We pointed to the Gorman case out of this circuit, as well as to other cases in the Second Circuit and the Sixth Circuit that looked at it under de novo standard of review and held that a range of numbers defined by less than a positive number clearly and unambiguously includes zero.

[01:07:05] Speaker 06:
Based on the argument you just heard about the fact that holds or operates, especially it's reinforced by incumbent, can be seen to presuppose holding or operating or having incumbents in some measure, even if it's a small measure.

[01:07:17] Speaker 06:
Your response is, if someone were to ask Frontier, do you hold or operate fewer than 40 slots?

[01:07:26] Speaker 06:
Your thinking is the answer has to be yes, because I have zero.

[01:07:32] Speaker 06:
Yes.

[01:07:33] Speaker 06:
Whereas, I mean, do you not at least acknowledge that if somebody said no, because I have zero.

[01:07:40] Speaker 06:
Do you not at least acknowledge that that's actually, you could understand why they would say that, because holder operates kind of seems to assume that you're holding or operating in some measure.

[01:07:49] Speaker 06:
So that's why it's prefaced by no.

[01:07:51] Speaker 06:
And then once you explain, because I have zero, you see, OK, well, I understand why you said no, because you don't have any.

[01:07:58] Speaker 02:
I can acknowledge that somebody could answer it that way.

[01:08:00] Speaker 02:
Of course, the court's role now is to look at what is the single best meaning of the statute.

[01:08:04] Speaker 02:
I don't think answering no to the question of, do I have fewer than 40 and I have zero?

[01:08:09] Speaker 02:
Well, no, I don't.

[01:08:11] Speaker 02:
You hold.

[01:08:12] Speaker 02:
You hold or operate fewer than 40.

[01:08:13] Speaker 02:
And the answer is no, I have zero.

[01:08:16] Speaker 02:
That seems like a very unnatural.

[01:08:18] Speaker 06:
No, I don't hold or operate any.

[01:08:20] Speaker 06:
Yeah.

[01:08:20] Speaker 02:
I don't think that's the right way to answer that question.

[01:08:23] Speaker 02:
I think the much more natural reading would be to say, yes, I hold or operate fewer than 40.

[01:08:28] Speaker 02:
If the question is posed that way and then pushed up against the fact that slot exemptions are included in new entrant, we can't be there, have to be something.

[01:08:37] Speaker 02:
The only thing that we can be under the plain language is as a limited incumbent.

[01:08:41] Speaker 04:
But the way you ask the question, it makes there assume that you're operating something as opposed to having zero.

[01:08:49] Speaker 04:
I think that's why there's a little bit of back and forth.

[01:08:51] Speaker 04:
And for me, Judge Hillard's example earlier, did you have fewer than two drinks?

[01:08:58] Speaker 04:
A person hearing that will feel like you're making an assumption that they had a drink, and they're trying to get from under that, that they don't want the police officer to think they had any.

[01:09:07] Speaker 04:
So they would say, no, I had no drinks.

[01:09:11] Speaker 02:
completely understand, I'm careful making assumptions with what Congress is trying to think, right?

[01:09:15] Speaker 02:
The plain language is the best indication of what it's trying to think.

[01:09:19] Speaker 02:
Then we go back to the point that slot exemptions through negative implication and through the express statement that, hey, this exclusion only applies to such sections, right?

[01:09:29] Speaker 02:
The limited incumbent definition, the regulation to other regulations that aren't relevant here.

[01:09:33] Speaker 02:
It's only excluded from limited incumbent.

[01:09:36] Speaker 02:
Therefore, it's included in the new entrant

[01:09:39] Speaker 02:
And so making that assumption, as you just did, that would mean the frontier is not a limited incumbent and also not a new entrant.

[01:09:46] Speaker 02:
And as we discussed, that's not appropriate.

[01:09:49] Speaker 02:
That offends what the statute's trying to get at.

[01:09:51] Speaker 02:
That also is totally contrary to how DOT always handles these situations.

[01:09:56] Speaker 02:
When DOT determines somebody's eligibility, they don't say, you're not a limited incumbent.

[01:10:01] Speaker 02:
See you later.

[01:10:01] Speaker 02:
They say, you're not a limited incumbent because you're something else.

[01:10:06] Speaker 05:
Well, when the question is whether you're eligible for limited first plots that are

[01:10:11] Speaker 05:
for which only limited and incumbent air carriers are eligible, it would make sense to just say, are you that?

[01:10:16] Speaker 02:
It would make sense, except look at how DOT treated Frontier in this case.

[01:10:21] Speaker 02:
Frontier says, we are a limited incumbent.

[01:10:23] Speaker 02:
We are entitled to these slots.

[01:10:24] Speaker 02:
DOT erroneously said, you're not a limited incumbent because you're a new entrant.

[01:10:30] Speaker 02:
It didn't say, you're not a limited incumbent.

[01:10:32] Speaker 02:
You are in Never Neverland.

[01:10:33] Speaker 02:
Good luck.

[01:10:34] Speaker 02:
It said, no, you have to be something.

[01:10:37] Speaker 02:
Again, that goes back to what the statute is really trying to get at.

[01:10:40] Speaker 02:
We are trying to bring in carriers to add competition, to add options, to add fares.

[01:10:46] Speaker 02:
And if we keep pushing carriers outside of categories, then it's not accomplishing that.

[01:10:51] Speaker 05:
I have a much earlier question that I should have asked you before, which is, if we were to determine that Frontier is ineligible to receive slot exemptions as a limited command,

[01:11:05] Speaker 05:
Air carrier, would you still have standing to dispute the award of the slot exemptions to Alaska?

[01:11:13] Speaker 02:
I don't believe so, Your Honor.

[01:11:15] Speaker 02:
I think there's a way to read some of the competitive standing cases in a way that we would.

[01:11:19] Speaker 02:
But I would at least agree that Frontier has not articulated that basis in the briefing.

[01:11:23] Speaker 05:
Although it seemed like maybe it did that below.

[01:11:25] Speaker 05:
And I was a little surprised by that.

[01:11:27] Speaker 05:
And the motion for an emergency stay of the department's order

[01:11:32] Speaker 05:
this was in the district court, you provided an affidavit from Joshua Flyer stating that Alaska's proposed flight to San Diego would cost you half a million dollars and lost revenue.

[01:11:42] Speaker 05:
But you don't rely on that here?

[01:11:43] Speaker 02:
I mean, I think you're right, Your Honor.

[01:11:45] Speaker 02:
I think the main point that we lead with is the court has to address our eligibility first.

[01:11:51] Speaker 02:
If you find that we're eligible, nobody questions that we have standing to dispute their eligibility.

[01:11:56] Speaker 02:
I think that there absolutely is a way to read the record.

[01:11:58] Speaker 02:
So that emergency motion came actually

[01:12:00] Speaker 02:
in this court, but it relied on a lot that was discussed in the agency proceedings.

[01:12:04] Speaker 02:
But I think you're absolutely right.

[01:12:06] Speaker 02:
And under the, whether it's disappointed bidder standing cases, whether it's competitor standing cases, you can say, yes, when you are competing against somebody in the exact same sandbox for the exact same scarce resources, a reading of a statute or regulation that expands how your competitor is able to compete, you do have standing to challenge that.

[01:12:27] Speaker 06:
But if you're not eligible to be in the sandbox to begin with, and it's about competition between other people, then you don't have the same stake.

[01:12:34] Speaker 02:
That's right.

[01:12:34] Speaker 02:
That's exactly right.

[01:12:35] Speaker 02:
That's how the competitor standing cases come out.

[01:12:37] Speaker 02:
And that's why I think our main argument is that we're eligible.

[01:12:41] Speaker 02:
We certainly have standing.

[01:12:43] Speaker 02:
Precisely.

[01:12:45] Speaker 02:
Happy to answer any questions on Alaska's co-chair provision if the court wants to talk about it.

[01:12:49] Speaker 02:
But I just think briefly.

[01:12:51] Speaker 02:
That provision couldn't be clearer.

[01:12:52] Speaker 02:
They undisputedly have a co-chair.

[01:12:54] Speaker 02:
It undisputedly exceeds the 20 slot and slot exemption cap of 522 together that facially renders them ineligible for the slot exemptions as a limited incumbent.

[01:13:06] Speaker 02:
So if there are no further questions for all the reasons stated here and in our briefs, we ask that the court grant, allocate the slot exemptions to Frontier, who is the only carrier who is eligible.

[01:13:15] Speaker 02:
Thank you.

[01:13:16] Speaker 06:
Thank you, counsel.

[01:13:17] Speaker 06:
Thank you to all counsel.

[01:13:18] Speaker 06:
We'll take this case under submission.