American Airlines v. Dept of Trans

• Court: Court of Appeals for the Fifth Circuit
• Decided: March 27, 2000
• Docket: 99-60008
• Status: Published

Opinion

REVISED - March 27, 2000

UNITED STATES COURT OF APPEALS FIFTH CIRCUIT

____________

No. 99-60008 ____________

AMERICAN AIRLINES, INCORPORATED; CITY OF DALLAS, TEXAS; SOUTHWEST AIRLINES COMPANY; LOVE FIELD CITIZENS ACTION COMMITTEE,

Petitioners,

versus

DEPARTMENT OF TRANSPORTATION,

Respondent.

No. 99-60239 ____________

THE CITY OF FORT WORTH; DALLAS-FORT WORTH INTERNATIONAL AIRPORT BOARD,

Petitions for Review of an Order of the U.S. Department of Transportation

February 1, 2000 Before DUHÉ, BARKSDALE, and EMILIO M. GARZA, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

This consolidated appeal involves respondent Department of Transportation’s (“DOT’s”)

interpretation of federal law governing airline service at Love Field airport. Petitioners Dallas-Fort

Worth International Airport Board (“DFW Board”), City of Fort Worth (“Fort Worth”), American

Airlines, Inc. (“American”), City of Dallas (“Dallas”), Southwest Airlines Company (“Southwest”),

and Love Field Citizens Action Committee (the “Committee”) petition for review of DOT’s

declaratory, procedural, and reconsideration orders. Legend Airlines, Inc. (“Legend”), Continental

Airlines, Inc. (“Continental”) and Continental Express, Inc. (“Continental Express”) have intervened.

For the reasons set forth below, we affirm.

I

Prior to 1968, Dallas and Fort Worth operated independent and competing airports. One of

Dallas’s airports was Love Field. DOT’s predecessor agency, the Civil Aeronautics Board (“CAB”),

found that the competition between Dallas’s and Fort Worth’s airports was harmful. Accordingly,

in 1964 CAB ordered the cities to build a jointly-operated airport that would serve as the region’s

primary airport. The cities responded by creating the DFW Board and by jointly adopting the 1968

Regional Airport Concurrent Bond Ordinance (the “Ordinance”). The Ordinance authorized the

issuance of bonds to finance the Dallas-Fort Worth Airport (“DFW”). Of critical importance here

is section 9.5 of the Ordinance, which contained the cities’ agreement to “take such steps as may be

necessary, appropriate and legally permissible . . . to provide for the orderly, efficient and effective

phase-out at Love Field, Redbird, GSIA and Meacham Field, of any and all Certificated Air Carrier

Services, and to transfer such activities to the [DFW] Regional Airport.”

The eight CAB-certified air carriers who were using the Dallas and Fort Worth airports first

signed “letter agreements” and then later signed “use agreements” with the DFW Board, agreeing to

move their air services to DFW as specified in the Ordinance. Southwest, which was solely running

intrastate flights from Love Field and thus was exempt from CAB certification and pressure, refused

-2- to move to DFW and did not sign a use agreement. Litigation ensued over efforts to force Southwest

from Love Field, terminating with our statement that “Southwest Airlines Co. has a federally declared

right to the continued use of and access to Love Field, so long as Love Field remains open.”

Southwest Airlines Co. v. Texas Int’l Airlines, Inc., 546 F.2d 84, 103 (5th Cir. 1977).

Congress deregulated the airline industry in 1978. Shortly thereafter, Southwest applied for

permission to provide interstate service between Love Field and New Orleans. CAB granted the

application, concluding that it lacked power to deny it. This prompted Congress to intervene by

enacting the Wright Amendment. See Pub. L. No. 96-192, § 29, 94 Stat. 35, 48-49 (1980). The

Wright Amendment generally bans interstate service from Love Field.1 However, it provides certain

exemptions from this ban, two of which are significant here: (1) the commuter airline exemption

allows interstate “air transportation provided by commuter airlines operating aircraft with a passenger

capacity of 56 passengers or less”; and (2) the contiguous state exemption allows flights to and from

Louisiana, Arkansas, Oklahoma, and New Mexico, if the flights do not “provide any through service

1 In its entirety, the Wright Amendment states: (a) Except as provided in subsection (c), notwithstanding any other provision of law, neither the Secretary of Transportation, the Civil Aeronautics Board, nor any other officer or employee of the United States shall issue, reissue, amend, revise, or otherwise modify (either by action or inaction) any certificate or other authority to permit or otherwise authorize any person to provide the transportation of individuals, by air, as a common carrier for compensation or hire between Love Field, Texas, and one or more points outside the State of Texas, except (1) charter air transportation not to exceed ten flights per month, and (2) air transportation provided by commuter airlines operating aircraft with a passenger capacity of 56 passengers or less. (b) Except as provided in subsections (a) and (c), notwithstanding any other provision of law, or any certificate or other authority heretofore or hereafter issued thereunder, no person shall provide or offer to provide the transportation of individuals, by air, for compensation or hire as a common carrier between Love Field, Texas, and one or more points outside the State of Texas, except that a person providing service to a point outside of Texas from Love Field on November 1, 1979 may continue to provide service to such point. (c) Subsections (a) and (b) shall not apply with respect to, and it is found consistent with the public convenience and necessity to authorize, transportation of individuals, by air, on a flight between Love Field, Texas, and one or more points within the States of Louisiana, Arkansas, Oklahoma, New Mexico, and Texas by an air carrier, if (1) such air carrier does not offer or provide any through service or ticketing with another air carrier or foreign air carrier, and (2) such air carrier does not offer for sale transportation to or from, and the flight or aircraft does not serve, any point which is outside any such State. Nothing in this subsection shall be construed to give authority not otherwise provided by law to the Secretary of Transportation, the Civil Aeronautics Board, any other officer or employee of the United States, or any other person. (d) This section shall not take effect if enacted after the enactment of the Aviation Safety and Noise Abatement Act of 1979. Id.

-3- or ticketing with another air carrier” and do not “offer for sale transportation to or from . . . any point

which is outside any such State.” Id.

In 1996, Dalfort Aviation, the parent corporation of Legend, announced plans to take

advantage of the commuter airline exemption by reconfiguring large commuter planes to hold only

56 seats. In response, the DOT General Counsel issued an opinion holding that the exemption

applied only to aircraft originally configured to seat less than 57 passengers. The DOT opinion was

mooted by the 1997 passage of the “Shelby Amendment” (collectively with the Wright Amendment,

the “Love Field amendments”). The Shelby Amendment defined the term “passenger capacity of 56

passengers or less” in the commuter airline exemption to “include[] any aircraft, except aircraft

exceeding gro ss aircraft weight of 300,000 pounds, reconfigured to accommodate 56 or fewer

passengers if the total number of passenger seats installed on the aircraft does not exceed 56.” See

Pub. L. No. 105-66, § 337, 111 Stat. 1425, 1447 (1997).2 The Shelby Amendment also expanded

the contiguous states exemption to allow direct flights between Love Field and airports within

Kansas, Alabama, and Mississippi. See id.

The parties in this case responded in various ways to the Shelby Amendment. Southwest

began offering flights between Love Field and Mississippi and Alabama. Legend has announced plans

to offer longhaul service to states outside the Love Field service area using large aircraft reconfigured

to have less than 57 seats. Continental Express plans to use regional jets with less than 57 seats to

2 The Shelby Amendment provides in its entirety that: (a) IN GENERAL.--For purposes of the exception set forth in section 29(a)(2) of the International Air Transportation Competition Act of 1979 (Public Law 96-192; 94 Stat. 48), the term "passenger capacity of 56 passengers or less" includes any aircraft, except aircraft exceeding gross aircraft weight of 300,000 pounds, reconfigured to accommodate 56 or fewer passengers if the total number of passenger seats installed on the aircraft does not exceed 56. (b) INCLUSION OF CERTAIN STATES IN EXEMPTION.--The first sentence of section 29(c) of the International Air Transportation Competition Act of 1979 (Public Law 96-192; 94 Stat. 48 et seq.) is amended by inserting "Kansas, Alabama, Mississippi," before "and Texas". (c) SAFETY ASSURANCE.--The Administrator of the Federal Aviation Administration shall monitor the safety of flight operations in the Dallas-Fort Worth metropolitan area and take such actions as may be necessary to ensure safe aviation operations. If the Administrator must restrict aviation operations in the Dallas-Fort Worth area to ensure safety, the Administrator shall notify the House and Senate Committees on Appropriations as soon as possible that an unsafe airspace management situation existed requiring the restrictions. Id.

-4- fly between Love Field and Cleveland. Continental Express and American offer intrastate flights from

Love Field to their hubs, in Houston and Austin respectively.

In response, Fort Worth sued Dallas, the DFW Board, Legend, Continental, and Continental

Express in Texas state court to block the proposed additional service fro m Love Field. The state

court found that the Ordinance was not preempted by federal law and that Dallas was obligated by

the Ordinance to preclude airlines from flying between Love Field and areas outside Texas and the

four-state service area authorized by the Wright Amendment. The state action is currently on appeal,

although the state appellate court has stayed the appeal pending our resolution of this case.

While the state court action was pending, Dallas filed a federal suit against DOT and Fort

Worth requesting declaratory relief on essentially the same issues involved in the state action. The

federal court has stayed that proceeding pending resolution of the instant case.

At the urging of several of the parties, and while both the federal and state actions were

pending, DOT initiated the interpretative proceeding that is the subject of this petition for review.

DOT issued an order informing the parties in this action3 that it intended to rule on four “federal law

issues” and allowing the parties an opportunity to submit comments on these issues. Subsequently,

in response to the parties’ initial comments, DOT issued a procedural order which, inter alia, granted

the DFW Board’s request to resolve a fifth legal issue and granted several parties’ request for an

extension of time in which to file comments.

DOT ultimately issued a “Declaratory Order” resolving the five questions it had set forth.

Specifically, DOT ruled that:

(i) the City of Fort Worth may not enforce any commitment by the City of Dallas . . . to limit operations at Love Field authorized by federal law, and the proprietary powers of the City of Dallas do not allow it to restrict services at Love Field authorized by federal law; (ii) the ability of the City of Dallas to limit the type of airline service operated at Love Field is preempted by the Wright and Shelby Amendments; (iii) any airline operating aircraft with a passenger capacity of no more than 56 passengers and a gross aircraft weight of no more than 300,000 pounds may operate service with any type of equipment and flights of any length from or to Love

3 Notice of this order was not sent to the Committee. The Committee subsequently learned of the proceeding and DOT granted its request for an extension of time to file comments.

-5- Field, notwithstanding any claim that such service violates any agreement between the Cities of Dallas and Fort Worth; (iv) the Dallas-Fort Worth International Airport Board may not enforce any contract provision that allegedly bars an airline from operating interstate airline service at another airport in the Dallas-Fort Worth metropolitan area; and (v) any airline may offer through service between Love Field and any other point to passengers using a flight between Love Field and another point within Texas operated under subsection (a) of the Wright Amendment, as amended by the Shelby Amendment . . . .

Declaratory Order at 58. In an accompanying “Procedural Order,” DOT rejected various procedural

objections raised by the parties. DOT subsequently reaffirmed its rulings on reconsideration.

II

We have jurisdiction to review DOT’s declaratory order by this petition for review. See 49

U.S.C. § 46110(e) (“[A] person disclosing a substantial interest in an order issued by the Secretary

of Transportation . . . may apply for review of the order by filing a petition for review in the . . . court

of appeals of the United States for the circuit in which the person resides or has its principal place of

business.”). The standard of review we apply differs according to the specific action DOT took.

Our review of DOT’s interpretation of the statutes it is charged with administering is

governed by the two-step standard of review established in Chevron, U.S.A., Inc. v. Natural

Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed.2d 694 (1984). We first

determine whether Congress directly spoke to the precise question in issue. If the intent of Congress

is clear, then we, and the agency, must give effect to the unambiguously expressed intent of Congress.

See id. at 842-43, 104 S. Ct. at 2781, 81 L. Ed. 2d at __. If Congress has not directly addressed the

precise question in issue, we ask whether the agency’s interpretation was “based on a permissible

construction of the statute.” Id. at 843, 104 S. Ct. at 2782, 81 L. Ed. 2d at __. As long as the

agency’s construction of an ambiguous statute is permissible, it must be upheld. See id.; Texas Oil

& Gas Assoc. v. EPA, 161 F.3d 923, 937-38 (5th Cir. 1998).

However, we only engage in the Chevron analysis when reviewing an agency’s interpretation

of a statute it was charged with administering. When reviewing DOT’s interpretation of a statute it

is not charged with administering, we do not grant DOT Chevron deference. See American Forest

and Paper Ass'n v. EPA, 137 F.3d 291, 297 (5th Cir. 1998) (“We do not, however, accord Chevron

-6- deference to EPA's interpretation of the ESA, because the ESA is not a statute that EPA is charged

with administering.”).

III

Several of the parties challenge DOT’s declaratory order on procedural grounds. They argue

that: (a) DOT violated the Administrative Procedure Act (“APA”), (b) its order improperly

contravened the earlier state court ruling on the same issues, and (c) DOT failed to comply with

environmental requirements before issuing its order.

A

Fort Worth and the DFW Board argue that DOT’s ruling violated the APA in various ways.

See 5 U.S.C. § 706 (directing a reviewing court to “hold unlawful and set aside agency action,

findings, and conclusions found to be . . . without observance of procedure required by law”).

Although DOT has already rejected some of these challenges in its earlier rulings, we review de novo

DOT’s interpretation and application of the APA. See Professional Reactor Operator Soc. v. U.S.

Nuclear Regulatory Comm’n, 939 F.2d 1047, 1051 (D.C. Cir. 1991) (“The Supreme Court has

indicated, however, that reviewing courts do not owe the same deference to an agency's interpretation

of statutes that, like the APA, are outside the agency's part icular expertise and special charge to

administer.”).

Several part ies contend that DOT failed to provide them with sufficient notice as required

under § 554(b) or, alternatively, § 553, of the APA. We exercise plenary review over whether DOT

complied with applicable procedures. See Chemical Mfrs. Ass’n v. EPA, 870 F.2d 177, 198 (5th Cir.

1989).

DOT issued its declaratory order after conducting an informal adjudication, pursuant to its

authority under § 554(e) to “issue a declaratory ruling to terminate a controversy or remove

uncertainty.” 5 U.S.C. § 554(e); see also Texas v. United States, 866 F.2d 1546, 1555 (5th Cir. 1989)

(“The ICC’s declaratory order was issued after an informal adjudication pursuant to the authority

-7- conferred by 5 U.S.C. § 554(e) to ‘issue a declaratory ruling to terminate a controversy or remove

uncertainty.’ Rendered in a specific factual context and resolving only the questions presented by [the

petitions], it ‘belongs to the genre of adjudicatory rulings.’”) (citations omitted). Several parties

object to DOT’s failure to adhere to the APA’s notice requirements for formal adjudications.

However, in the absence of a statute requiring an agency to conduct its adjudication “on the record

after opportunity for agency hearing,” 5 U.S.C. § 554(a), an agency can define its own procedures

for conducting an informal adjudication. See Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S.

633, 655-56, 110 S. Ct. 2658, 2680-81,110 L. Ed. 2d 563, __ (1990).

While the APA does not expressly require notice in informal adjudications, courts have

inferred a requirement that there be “some sort of procedures for notice [and] comment . . . as a

necessary means of carrying out our responsibility for a thorough and searching review [of agency

action].” Independent U.S. Tanker Owners Committee v. Lewis, 690 F.2d 908, 923 (D.C. Cir. 1982).

Here, DOT issued an order in which it specified the legal issues on which it would rule, allowed the

parties to submit comments on these issues, and extended the comment period at the request of

several parties. It then ruled on precisely the issues that it identified. We find that DOT’s actions

satisfied the minimum procedural notice requirements. See id.

Fort Worth contends that DOT failed to comply with § 554(b) by neglecting to notify parties

that DOT would also be considering a factual issue: the effect of increased service at Love Field on

DFW Airport. This argument fails for two reasons. First, as noted, the formal notice requirement

of § 554(b) does not apply to an informal adjudication. Second, the parties were effectively on notice

of this issue since it was one that they could reasonably expect to arise given the issues of which DOT

gave notice. Cf. Boston Carrier Inc. v. Interstate Commerce Comm’n, 746 F.2d 1555, 1559 (D.C.

Cir. 1984) (“The Commission is not burdened with the obligation to give every applicant a complete

bill of particulars as to every allegation that carrier will confront.”). The fact that Dallas, Continental

Express, and Legend all submitted factual evidence to DOT should also have put Fort Worth on

notice that it could submit its own factual evidence.

-8- We also note the absence of anything in the record to indicate that Fort Worth possesses any

information bearing on the impact of increased service at Love Field. Fort Worth has had three

opportunities to present or identify such evidence—during the comment period, in its motion for

reconsideration, and in its brief on appeal—but has not demonstrated that it possesses relevant factual

information not considered by DOT. This continued failure to identify the evidence it would have

submitted indicates that Fort Worth was not prejudiced by any inadequacy in DOT’s notice. See 5

U.S.C. § 706 (in reviewing an agency determination, “due account shall be taken of the rule of

prejudicial error”); Friends of Iwo Jima v. Nat’l Capital Planning Comm’n, 176 F.3d 768, 774 (4th

Cir. 1999) (“Moreover, the party who claims deficient notice bears the burden of proving that any

such deficiency was prejudicial.”).

We also reject the DFW Board’s argument that DOT’s order amounts to a substantive rule

subject to the notice and comment provision of § 553. Agencies have discretion to choose between

adjudication and rulemaking as a means of setting policy. See NLRB v. Bell Aerospace Co. Div. of

Textron, Inc., 416 U.S. 267, 294, 94 S. Ct. 1757, 1771, 40 L. Ed.2d. 134, __ (1974); Mobil

Exploration and Producing North America, Inc. v. FERC, 881 F.2d 193, 198 (5th Cir. 1989) (citing

Bell Aerospace). In determining whether an agency action constituted adjudication or rulemaking,

we look to the product of the agency act ion. We also accord significant deference to an agency’s

characterization of its own action. See British Caledonian Airways, Ltd. v. Civil Aeronautics Bd.,

584 F.2d 982, 992 (D.C. Cir. 1977) (“In the present case we have, moreover, the Board’s own

assertion that its order is purely interpretive, and this contention in itself is entitled to a significant

degree of credence . . . . While declaratory orders differ in some respects from interpretive rules, the

same rationale sho uld apply equally to an agency’s characterization of one of its rulings as a

declaratory order.”). Since the APA defines “adjudication” as the “agency process for formulating

an order,” 5 U.S.C. § 551(7), and DOT classifies its ruling as a declaratory order, we find that the

agency engaged in adjudication rather than rulemaking. Furthermore, because DOT’s order

interpreted the rights of a small number of parties properly before it, DOT did not abuse its discretion

-9- by acting through an adjudicatory proceeding. See British Caledonian Airways, 584 F.2d at 992-94;

Mobil Exploration, 881 F.2d at 199 (finding no abuse of discretion where, inter alia, an agency

proceeded by adjudication to resolve an issue affecting a small number of parties).

Fort Worth, joined by American, also argues that it was deprived of its right to a fair agency

determination because of ex parte contacts between Continental Express, Legend, and DOT. Fort

Worth cites specific instances when Continental Express and Legend officials contacted DOT about

the pending state and federal court actions and asked DOT to intervene in these actions. The officials

suggested specific actions which DOT could take and strongly advocated for DOT’s intervention,

including by characterizing the state court proceedings in unfavorable terms. DOT responded at one

point with a written letter answering four questions posed by Continental. DOT and Legend do not

dispute that the contacts took place, but they both argue that the contacts were proper and did not

bias DOT’s final decision.

DOT regulations prohibit certain ex parte contacts between agency personnel and interested

parties.4 See 14 C.F.R. § 300.2(a). Most of the contacts here fall outside these regulations because

they occurred before DOT inst ituted its interpretation proceeding. See 14 C.F.R. § 300.2(a)

(“[T]here shall be no substantive communication in either direction between any concerned DOT

employee and any interested person outside DOT, concerning a public proceeding, until after final

disposition of the proceeding.”) (emphasis added); id. § 300.2(b)(4)(v) (defining a public proceeding

as a “proceeding initiated by a docket filing, other than a petition for generally applicable rulemaking,

after the filing in the docket of an identifiable written opposition to the initiating document”)

(emphasis added). Additionally, most of the contacts, including those which occurred after DOT

initiated its proceeding, did not involve the merits of the proceedings but rather were permissible

4 Fort Worth also relies on the APA ban on ex parte communications, but this ban does not apply here, because it does not cover informal adjudications. See 5 U.S.C. § 557(a), (d) (stating that the prohibition on ex parte contacts applies “when a hearing is required to be conducted in accordance with section 556 ”); id. § 556 (governing formal hearings).

-10- requests to intervene in the state and federal action. See Texas, 866 F.2d at 1550 (finding that an

individual’s request for the Interstate Commerce Commission to intervene in a pending state action

was not an ex parte communication because it did not involve the merits of the case).

B

The posture of the case presents more serious procedural concerns. DOT and the state court

issued contrary rulings on some of the same issues in proceedings involving some of the same parties.5

Consequently, Fort Worth, the DFW Board, and American (co llectively “Fort Worth

petitioners”) ask us to reverse DOT’s action because (1) DOT violated the full faith and credit

statute, 28 U.S.C. § 1738, by not granting preclusive effect to the prior state court ruling, and (2)

DOT violated the Anti-Injunction Act and corresponding common law principles of federalism by

issuing a declaratory order affecting a case currently pending before a state court. DOT rejected

these arguments in its earlier rulings, but we do not defer to DOT’s ruling on these issues. See

American Forest and Paper Ass'n, 137 F.3d at 297.

The full faith and credit statute, 28 U.S.C. § 1738, generally requires federal courts to grant

preclusive effect to state court judgments: “[t]he records and judicial proceedings of any court of any

. . . State . . . . shall have the same full faith and credit in every court within the United States . . . as

they have by law or usage in the courts of such State . . . from which they are taken.” Id. The plain

language of this section establishes that it does not apply here: § 1738 applies only to “every court

within the United States,” and DOT is an agency, not a “court.” Id. (emphasis added). The only

5 Although the state and DOT proceedings overlapped, neither tribunal made significant efforts to accommodate the views of the other. The state court essentially gave DOT one month to issue its declaratory order and when DOT failed to do this, the state court ruled without the benefit of DOT’s views. DOT, on the other hand, did not issue its declaratory order within the time set by the state court, did not attempt to intervene in the state court action even though some of the parties there asked it to intervene, and did not ask the state court to stay its ruling until DOT ruled on the same issues. Instead, DOT rejected the state court’s view in its order, noting only the state court’s lack of reasoning in support of its position.

-11- other circuit to address fully this issue agrees with this reading of § 1738.6 See NLRB v. Yellow

Freight Systems, Inc., 930 F.2d 316, 320 (3d Cir. 1991) (finding that the NLRB, by virtue of its

status as an agency rather than a court, was not required to give full faith and credit to an earlier state

court judgment); cf. Consolidated Oil & Gas, Inc. v. FERC, 806 F.2d 275, 280 n.5 (D.C. Cir. 1986)

(“We agree with the FERC, though, that ‘[t]he fact that the state court ruled on t he same issue,

regardless whether its ruling agreed with the Commission's ruling, does not affect the Commission's

authority to determine its own jurisdiction.’”).

The Supreme Court adopted this plain reading of § 1738 when presented with the question

of whether a federal court must accord full faith and credit to an unreviewed state agency proceeding.

See University of Tennessee v. Elliott, 478 U.S. 788, 794, 106 S. Ct. 3220, 3224, 92 L. Ed. 2d 635,

__ (1986). Reading § 1738's references to “courts” as not including “agencies,” the Elliott court

concluded simply that Ҥ 1738 governs the preclusive effect to be given the judgments and records

of state courts, and is not applicable to the unreviewed state administrative factfinding at issue in this

case.” Id. at 794, 106 S. Ct. at 3224, 92 L. Ed. 2d at __.

Finding that § 1738 does not apply to agencies does not end our inquiry, however, as courts

“have frequently fashioned federal common-law rules of preclusion in the absence of a governing

statute.” Id. at 794, 106 S. Ct. at 3224, 92 L. Ed. 2d at __. The Supreme Court fashioned such a

6 The Fort Worth petitioners rely on two district court cases which have arguably held to the contrary. In Torres v. Gardner, 270 F. Supp. 1 (D.P.R. 1967), the court stated in passing that “[t]he Administrative agencies of the United States are no less bound that he [sic] courts of the United States to give full faith and credit to the decisions of the Courts of Puerto Rico.” Id. at 4. The court did not cite § 1738, and thus it might have relied instead on the common law preclusion doctrines we discuss below. In Midgett v. United States, 603 F.2d 835 (Ct. Cl. 1979), the court cited Torres and stated: “Section 1738 of 28 U.S.C. imposes on a federal court presented with a state court judgment the same force and conclusive effect as it has in the state in which it is rendered. Administrative bodies of the United States as well as courts are required to adhere to this requirement.” Id. at 845 (citation omitted). The court did not clearly indicate that it based its holding on § 1738, as opposed to merely analogizing to § 1738. We cannot conclude with certainty whether these cases relied on § 1738. To the extent they did, we believe the better rule, for the reasons stated above and herein, is that § 1738 does not apply to agencies, but the rationale underlying § 1738 extends to agencies through common law preclusion doctrines. This rule is consonant with Supreme Court precedent and the plain text of § 1738, and it accounts for the concerns raised by the Midgett and Torres courts. Fort Worth also argues that United States v. ITT Rayonier, Inc., 627 F.2d 996 (9th Cir. 1980) addresses the question presented here. In ITT Rayonier, the Ninth Circuit held that the Environmental Protection Agency (“EPA”) was bound by res judicata from pursuing an enforcement action when a prior enforcement action had been litigated in state court. See id. at 999-1004. The Ninth Circuit applied res judicata because it found that the EPA was in privity with the parallel state agency which had pursued the state enforcement action. See id. at 1002-04. ITT Rayonier is distinguishable from the present case, because Fort Worth has made no showing that DOT was in privity with any party in the state court action.

-12- rule in Elliott, requiring federal courts to grant preclusive effect to findings of fact by state agencies

in most subsequent federal actions. See id. at 796-99, 106 S. Ct. at 3224-26, 92 L. Ed. 2d at __

(holding also that no preclusive effect should be given to state administrative agency factfinding in

Title VII cases). To det ermine whether common law preclusion should apply here, we consider

whether the policies favoring full faith and credit, including repose and federalism concerns, see

generally Allen v. McCurry, 449 U.S. 90, 95-96, 101 S. Ct. 411, 415, 66 L. Ed. 2d 308, __ (1980)

(“[R]es judicata and collateral estoppel not only reduce unnecessary litigation and foster reliance on

adjudication, but also promote the comity between state and federal courts that has been recognized

as a bulwark of the federal system.”), outweigh the federal interests present here, see Midgett, 603

F.2d at 845 (“A judgment or decree of a state court whose effect would restrain the exercise of

sovereign power of the United States by imposing requirements that are contrary to important and

established federal policy would not be given effect in a federal court.”); cf. Yellow Freight, 930 F.2d

at 320 (discussing policy reasons why an agency should not be bound by § 1738). See generally

American Mannex Corp. v. Rozands, 462 F.2d 688, 690 (5th Cir. 1972) (suggesting, in dicta, that §

1738 can be trumped by “well-defined [competing] federal policies”); 18 Charles Alan Wright, et al.,

Federal Practice and Procedure § 4469, at 662-63 (1981) (“In various settings, federal courts have

found that vital federal interests warrant rejection of the res judicata rules that state courts would

apply to their own judgments.”).

Applied here, the competing policy considerations weigh against requiring DOT to grant

preclusive effect to the state court proceeding.7 Cf. Yellow Freight, 930 F.2d at 320-22 (holding that

the NLRB was not bound by an earlier arbitrator’s factfinding, even though the arbitrator’s ruling was

affirmed by a state court, because essential evidence was not presented to the arbitrator). First, the

importance of repose here, while not insubstantial, is limited by the posture of this case. At the time

7 Because we resolve the matter on these grounds, we do not reach DOT’s alternative argument that the state court judgment should not be granted preclusive effect because a Texas court would not grant the judgment preclusive effect. See generally Matsushita Elec. Indus. Co., Ltd. v. Epstein, 516 U.S. 367, 374, 116 S. Ct. 873, 878, 134 L. Ed. 2d 6, __ (1996) (“When faced with a state court judgment relating to an exclusively federal claim, a federal court must first look to the law of the rendering State to ascertain the effect of the judgment.”).

-13- the state court issued its ruling, parallel agency proceedings were already underway.

Second, this case involves aviation regulation, an area where federal concerns are preeminent

and where DOT is charged with representing those concerns. See Northwest Airlines, Inc. v. County

of Kent, 510 U.S. 355, 366-67, 114 S. Ct. 855, 863, 127 L. Ed. 2d 183 (1994) (“The Secretary of

Transportation is charged with administering the federal aviation laws . . . .”); Northwest Airlines v.

Minnesota, 322 U.S. 292, 303, 64 S. Ct. 950, 956, 88 L. Ed. 1283, __ (1944) (Jackson, J.,

concurring) (“Congress has recognized the national responsibility for regulating air commerce.

Federal control is intensive and exclusive.”), quoted in City of Burbank v. Lockheed Air Terminal

Inc., 411 U.S. 624, 633-34, 93 S. Ct. 1854, 1860, 36 L. Ed.2d 547, __ (1973); 849 U.S.C. §

46101(a)(2) (granting the Secretary of Transportation discret ion to “conduct an investigation . . .

about . . . any question that may arise under this part”). Additionally, this case involves the operation

of flights fro m Love Field, a matter on which Congress has twice specifically legislated. DOT’s

interpretive order is the first time that DOT, the agency specifically charged with administering the

Wright Amendment, has interpreted the Shelby Amendment. See Cramer v. Skinner, 931 F.2d 1020,

1024 (5th Cir. 1991) (noting that “[t]he individual defendants in their official capacity, DOT, and

DOT's Office of Aviation Analysis enforce the [Wright] amendment”); State of Kansas v. United

States, 16 F.3d 436, 438 (D.C. Cir. 1994) (same). To allow the state court effectively to foreclose

the administering agency from further consideration of the Shelby Amendment as to the parties which

appeared before the state court would trump the key federal interests that motivated Congress to

create DOT and give it authority over these laws.8

Finally, applying full faith and credit principles to DOT in this case would lead to inconsistent

results. Cf. Access Telecommunications v. Southwestern Bell Tel. Co., 137 F.3d 605, 608 (8th Cir.

1998) (noting that the primary jurisdiction doctrine, under which courts refer matters to agencies

8 These key federal interests are arguably lessened by the fact that DOT did not attempt to stay or intervene in the state court action; presumably if the federal interests were that important, DOT would have taken one of these actions. DOT’s inaction is partially justified by the limited amount of time it had to intervene, as the state court only stayed the proceedings before it for one month.

-14- when the matters are within agency jurisdiction, is motivated in part by the desire “to promote

uniformity and consistency within the particular field of regulation”). Some of the parties before

DOT are litigating these issues for the first time. Forcing DOT to grant preclusive effect to the state

court ruling would lead to inconsistent application of the Shelby Amendment to the parties that did

not appear before the state court.

In sum, because of the important federal interests here, we decline to hold that common law

preclusion doctrines apply in this case. Instead, DOT properly declined to give preclusive effect to

the state court judgment.9

The Fort Worth Petitioners also argue that DOT’s actions violated the Anti-Injunction Act,

28 U.S.C. § 2283, which provides that “[a] court of the United States may not grant an injunction

to stay proceedings in a State court except as expressly authorized by Act of Congress, or where

necessary in aid of its jurisdiction, or to protect or effectuate its judgments.” 28 U.S.C. § 2283. We

“follow the weight of authority in holding that [i]f an injunction would be barred by § 2283, this

should also bar t he issuance of a declaratory judgment that would have the same effect as an

injunction.” Texas Employers' Ins. Ass'n v. Jackson, 862 F.2d 491, 506 (5th Cir. 1988) (en banc)

(quotation omitted) (alteration in original); see also Travelers Ins. Co. v. Louisiana Farm Bureau

Fed’n, Inc., 996 F.2d 774, 776 (5th Cir. 1993) (“[T]he district court may not consider the merits of

the declaratory judgment action when 1) a declaratory defendant has previously filed a cause of action

in state court against the declaratory plaintiff, 2) the state case involves the same issues as those

9 We reject the Fort Worth petitioners’ invocation of the so-called Rooker-Feldman doctrine for the same reasons. “In a nutshell, the doctrine holds that inferior federal courts do not have the power to modify or reverse state court judgments.” Matter of Reitnauer, 152 F.3d 341, 343 (5th Cir. 1998) (applying the doctrine where “[t]he district court . . . made apparent its displeasure with the manner in which the state court interpreted and applied state law [and] such displeasure formed the basis for its reversal of the bankruptcy court's order”). As we have previously noted, the Rooker-Feldman doctrine is “very close if not identical to the more familiar principle that a federal court must give full faith and credit to a state court judgment.” Gauthier v. Continental Diving Servs., Inc., 831 F.2d 559, 561 (5th Cir. 1987). Thus, we have not applied the Rooker-Feldman jurisdictional bar in cases where we have found it inappropriate to require a federal court to give full faith and credit to a state court judgment. See id. (not applying the Rooker- Feldman doctrine where full faith and credit does not apply because the state court judgment would not be entitled to preclusive effect under state law). We follow this practice here. The Fort Worth petitioners have not cited any cases where the Rooker-Feldman doctrine has been applied to an agency ruling on matters of federal law previously addressed by a state court. In light of the above-noted concerns, we see no reason to extend the doctrine to this context.

-15- involved in the federal case, and 3) the district court is prohibited from enjoining the state

proceedings under the Anti-Injunction Act.”) (emphasis in original).

As a federal agency, DOT’s proceedings are exempt from the terms of § 2283, which applies

only to proceedings in a “court of the United States.” 28 U.S.C. § 2283; see also id. § 451 (“As used

in this title[,] [t]he term ‘court of the United States’ includes the Supreme Court of the United States,

courts of appeals, district courts constituted by chapter 5 of this title, including the Court of

International Trade and any court created by Act of Congress the judges of which are entitled to hold

office during good behavior.”). Further, even where an action is ongoing in a “court of the United

States,” an agency’s presence as a party, together with the federal interest the agency represents, can

trump the application of § 2283. See Mitchum v. Foster, 407 U.S. 225, 235-36, 92 S. Ct. 2151,

2158-59, 32 L. Ed. 2d 705, __ (1972) (“[A] third exception [to § 2283], more recently developed

permits a federal injunction of state court proceedings when the plaintiff in the federal court is the

United States itself, or a federal agency asserting ‘superior federal interests.’”); Texas v. United

States, 837 F.2d 184, 186 (5th Cir. 1988) (“Moreover, because a federal agency seeks the injunction,

the ICC's motion is not directly precluded by the strictly enforced rule of the Anti-Injunction Act, 28

U.S.C. § 2283.”); United States v. Lemaire, 826 F.2d 387, 388 n.2 (5th Cir. 1987) (“The Act does

not prevent the United States, or one of its agencies, from acting to protect a federal interest.”).

Thus, § 2283 does not restrict our ability to review the agency’s decision.

Fort Worth’s authority to the contrary is unavailing. The case before us is clearly

distinguishable from United Credit Bureau of America, Inc. v. NLRB, 454 U.S. 994, 102 S. Ct. 539,

70 L. Ed. 2d 404 (1981) (Rehnquist, J., dissenting from denial of certiorari), where then-Justice

Rehnquist dissented from the denial of certiorari to argue that “the concerns of federalism and comity

comprehended by the Anti-Injunction Act should . . . apply to the NLRB.” Id. at 997-98, 102 S. Ct.

at 541, 70 L. Ed. 2d at __.10 In United Credit, the NLRB ordered a party to dismiss a state court

10 We note in passing that, as a denial of a petition for certiorari, the United Credit Bureau opinion is not binding authority. See Teague v. Lane, 489 U.S. 288, 296, 109 S. Ct. 1060, 1067, 103 L. Ed. 2d 334 (1989).

-16- action. It did this without “consider[ing] whether the state-court proceeding interfered with its ability

to consider or dispose of [the agency petitioner’s] charges.” United Credit, 454 U.S. at 998, 102 S.

Ct. at 541, 70 L. Ed. 2d at __ (noting that the state court had not yet acted). Here, the state court

action, at least at the trial level, was completed, thus lessening DOT’s intrusion and strengthening its

reasons for issuing its own interpret ation of the legal issues. Also, DOT’s interest here is not its

interest in resolving an individual petitioner’s claim, as in United Credit, but rather its interest in

avoiding piecemeal application of a federal aviation statute.

Additionally, we do not believe that DOT violated general principles of federalism by issuing

its ruling. Although the Fort Worth Petitioners correctly note that state courts are com petent to

resolve matters of federal law, this does not prevent federal agencies from acting within their

authority to protect federal interests. Accordingly, the cases that the Fort Worth Petitioners cite in

support of their federalism arguments are clearly distinguishable. See, e.g., Giles v. NYLCare Health

Plans, Inc., 172 F.3d 332, 339 (5th Cir. 1999) (holding that a district court properly remanded a state

law claim after dismissing federal claims, even though one of the state law claims involved a

preemption defense, because “state courts, being of equal dignity with federal courts, are equally

competent to address that potential defense”).

C

As a final procedural objection, the Committee argues that DOT improperly ruled without first

preparing an environmental impact statement (“EIS”). The National Environmental Policy Act

(“NEPA”) directs “all agencies of the Federal Government . . . [to] include [an EIS] in every

recommendation or report on proposals for legislation and other major Federal actions significantly

affecting the quality of the human environment.” 42 U.S.C. § 4332(2). DOT found that it did not

need to prepare an EIS, but because it is not charged with administering NEPA, its decision to not

prepare an EIS is not entitled to deference. See American Forest and Paper Ass'n, 137 F.3d at 297.

The Committee argues that DOT’s “decision” to allow increased flights constitutes a “major

Federal action” under NEPA. We disagree. Agency decisions which “do not entail the exercise of

-17- significant discretion” do not require an EIS. Atlanta Coalition on Transp. Crisis, Inc. v. Atlanta

Regional Comm’n, 599 F.2d 1333, 1344-45 (5th Cir. 1979). By enacting the Shelby Amendment,

Congress, not DOT, made the decision to allow additional flights at Love Field. DOT merely issued

an interpretation of federal law that it was required to adopt under the relevant statutes.11 See

Sugarloaf Citizens Ass'n v. FERC, 959 F.2d 508, 513 (4th Cir. 1992) (“Other Circuits have held that

when an agency has no discretion to consider environmental values implementing a statutory

requirement, its actions are ministerial and not subject to NEPA.”); Goos v. ICC, 911 F.2d 1283,

1296 (8th Cir. 1990) (“Because the ICC has not been granted any discretion under section 1247(d)

to base its issuance of an NITU or CITU on environmental consequences, we agree that it would

make little sense to force the ICC to consider factors which cannot affect its decision . . . .”); Milo

Community Hospital v. Weinberger, 525 F.2d 144, 147 (1st Cir. 1975) (finding that no EIS was

necessary where “consideration of the factors that the appellant has characterized as ‘environmental

considerations’ could not have changed the Secretary's decision”).12

IV

The Declaratory Order stated that DOT intended to rule on four “federal law issues.” DOT’s

subsequent Procedural Order added a fifth legal issue to the agency’s docket. We review each of

DOT’s rulings in turn.

11 For example, 49 U.S.C. § 41713, which DOT interpreted here, does not grant DOT discretion because Congress has defined the extent of federal preemption and has specified which state rights remain. On the other hand, when DOT applies § 41714(c), governing the award of slots to new entrants, DOT is clearly granted discretion by the statute. See 49 U.S.C. § 41714(c) (“If the Secretary finds it to be in the public interest and the circumstances to be exceptional, the Secretary may by order grant exemptions from the requirements under subparts K and S of part 93 of title 14, Code of Federal Regulations, to enable new entrant air carriers to provide air transportation at high density airports. ”) (parentheticals omitted and emphasis added). Thus, when applying § 41714, DOT follows NEPA. See, e.g., Applications of Trans States Airlines, Inc., DOT Order 98-4-21, 1998 DOT Av. LEXIS 159, at *54-*55 (1998) (conducting an environmental assessment in a § 41714 determination). 12 The Committee also argues that DOT failed to follow its own environmental procedures. The Committee relies on an FAA statement of “Polices and Procedures on Considering Environmental Impacts” which, as DOT notes, is inapplicable here because it “establishes Federal Aviation Administration (FAA) policies and procedures.” DOT was not acting under the auspices of the FAA in this case. Instead, DOT asserts that the relevant DOT guidelines still require major agency action before undertaking an EIS, and we agree. See 44 Fed. Reg. 56420, 56424 (1979) (“An EIS shall be prepared for any proposed major Federal action significantly affecting the environment.”); see also id. (requiring an environmental assessment when “a decision has not been make [sic] to prepare an EIS,” but noting that the environmental assessment describes “the environmental impacts of a proposed action”). The Committee does not cite any contrary authority in its reply brief.

-18- A

We first turn to DOT’s ruling that the preemption provision of the Airline Deregulation Act

(“ADA”), 49 U.S.C. § 41713(b)(1), preempted Dallas’s and Fort Worth’s obligations under the

Ordinance. In reaching this decision, DOT also determined that Dallas’s rights as the proprietor of

Love Field did not permit it to bar airlines from operating the services authorized under the Shelby

Amendment. On appeal, the Fort Worth Petitioners argue that the power to restrict services at Love

Field falls within Dallas’s rights as proprietor of the airport. Thus, they argue, Dallas has an existing

contractual obligation to restrict service at Love Field so as to block airlines from operating the

services permitted under the Shelby Amendment.

The ADA includes an express preemption provision, § 41713(b)(1), which generally prohibits

states from enacting or enforcing a law or regulation “related to a price, route, or service of an air

carrier.” 49 U.S.C. § 41713(b)(1). At the same time, the ADA reserves the state’s authority to carry

out its “proprietary powers and rights.” 49 U.S.C. § 41713(b)(3) (hereinafter, the “proprietary

powers exception”).

The proper standard of review to apply to DOT’s preemption determination is the subject of

extensive debate and briefing among the parties. It is also an issue of first impression before us. The

Fort Worth Petitioners contend that DOT’s interpretation of the proprietary powers exception should

be afforded no deference because DOT lacks both the authority and the expertise to interpret this

section of the ADA. DOT, Dallas, and Continental Express argue that DOT’s general authority to

administer the ADA inherently includes the power to administer the statute’s preemption provision.

Consequently, they argue for deferential review of DOT’s preemption determination under Chevron.

The Fort Worth Petitioners present several strong arguments in favor of de novo review. A

preemption determination does indeed involve legal determinations, which are arguably more within

the expertise of the courts. See Colorado Public Utilities Comm’n v. Harmon, 951 F.2d 1571 (10th

Cir. 1991) (adopting a de novo standard of review because “[a] preemption determination involves

-19- matters of law–an area more within the expertise of courts than within the expertise of the Secretary

of Transportation”). In reaching its decision, DOT interpreted existing case law, a role more

typically—and perhaps more appropriately— left to the courts. Beyond this, the task of defining

what constitutes a “proprietary power” has traditionally been left to the courts. See, e.g., National

Helicopter Corp. of America v. City of New York, 137 F.3d 81 (2d Cir. 1998) (assessing the validity

of restrictions on operation at a heliport). Additionally, Congress appears to have evinced an intent

to codify the proprietary rights existing when the ADA was enacted rather than an intent to allow

DOT to define proprietary rights. Cf. Western Air Lines v. Port Authority of New York and New

Jersey, 658 F. Supp. 952, 956 (S.D.N.Y. 1986) (“The legislative history of Section 1305(b)(1)

indicates that the airport proprietor would be permitted to take those actions ‘presently accepted as

valid exercises of proprietary powers.’”) (internal citation omitted).

DOT, however, presents strong arguments supporting the contrary position. DOT is charged

with administering the aviation laws as a whole. See Northwest Airlines, Inc. v. County of Kent, 510

U.S. 355, 366-67 (5th Cir. 1994) (“The Secretary of Transportation is charged with administering the

federal aviation laws . . . .”). More significantly, DOT is the “superintending agency” with respect

to the administration of the ADA. See American Airlines v. Wolens, 513 U.S. 219, 229 n.6, 115A

S. Ct. 817 n.6, 824, 130 L. Ed. 715, __ (1995). The First Circuit has come close to holding that this

power encompasses the authority to interpret the preemption section of the ADA. See New England

Legal Foundation v. Massachusetts Port Authority, 883 F.2d 157,167 (1st Cir. 1989) (finding that

DOT was one of “two judicial actors with apparent jurisdiction over the [preemption] subject matter

which they decided” ). Absent any clear evidence to the contrary, we are nearly persuaded that DOT

possesses the authority to interpret the preemption provision of the ADA and that, consequently, we

should defer to its interpretation of that provision. See Texas Oil & Gas Ass’n, 161 F.3d at 937. We

need not, however, make this final determination here. Because we conclude that DOT’s ruling that

§ 41713 of the ADA preempted the Ordinance was correct under either standard of review, we

decline to decide this issue at this time.

-20- 2

Congress passed the ADA in 1978 in an effort both to end federal economic regulation of

commercial aviation and to promote competition within the airline industry. Fearful that in the face

of federal deregulation, states would enact conflicting laws regulating the airline industry, Congress

enacted § 41713(b)(1) of the ADA, which provides that:

Except as provided in this subsection, a State, political subdivision of a State, or political authority of at least 2 States may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier that may provide air transportation under this subpart.

49 U.S.C. § 41713(b)(1); see also New England Legal Foundation, 883 F.2d at 173 (“In reducing

federal economic regulation of the field . . . Congress obviously did not intend to leave a vacuum to

be filled by the Balkanizing forces of state and local regulation.”). When enacting the ADA, however,

Congress also recognized that airport proprietors—the majority of which are municipalities, see City

of Burbank, 411 U.S. at 635, 93 S. Ct. at 1860, 36 L. Ed.2d at __—were best equipped to handle

local problems arising at and around their facilities. Accordingly, the ADA provides that the

preemptive effect of § 41713(b)(1) does “not limit a State, political subdivision of a State, or political

authority of at least 2 States that owns or operates an airport . . . from carrying out its proprietary

powers and rights.” 49 U.S.C.A. § 41713(b)(3).

The restrictions on service at Love Field under the Ordinance appear to operate as limitations

“relating to . . . routes” within the meaning of § 41713(b)(1), see Western Air Lines, 658 F. Supp. at

952 (finding that a perimeter rule “relat[ed] to routes”), and the parties present no significant argument

to the contrary. Co nsequently, the only issue before us is whether the power to enforce the

restrictions falls within the proprietary powers exception. The Fort Worth petitioners contend that the

restrictions on service at Love Field fall within Dallas’s proprietary powers.

The precise scope of an airport owner’s proprietary powers has not been clearly articulated

by any court. See, e.g., id. at 956 (“The extent of ‘proprietary powers and rights’ has not yet been

established.”). However, several courts have examined when an airport owner’s enactment of a

-21- “perimeter rule”13 or similar route restriction falls within the proprietary powers exception. These

courts have recognized that local proprietors play an “extremely limited” role in the regulation of

aviation. See, e.g., id. at 956 (“[A]irport proprietors have an ‘extremely limited role’ in the system

of aviation regulation . . . .”) (quoting British Airways Bd. v. Port Auth., 564 F.2d 1002, 1010 (2d Cir.

1977)). In defining the permissible scope of a proprietor’s power to regulate under § 41713(b)(3),

federal courts have repeatedly held that an airport proprietor can issue only “reasonable, nonarbitrary,

and nondiscriminatory rules that advance the local interest.” Id. at 958; see also National Helicopter

Corp. of America, 137 F.3d at 88-89 (limiting the permissible subject matter of local regulations to

“aircraft noise and other environmental concerns at the local level”); British Airways, 558 F.2d at 84

(stating that a proprietor “is vested only with the power to promulgate reasonable, non-arbitrary and

non-discriminatory regulations that establish acceptable noise levels for the airport and its immediate

environs.”); cf. City and County of San Francisco v. FAA, 942 F.2d 1391, 1394 (9th Cir. 1990)

(“Congress made it clear, however, that the power delegated to airport proprietors to adopt noise

control regulations is limited to regulations that are not unjustly discriminatory.”).

Courts applying this standard have upheld route restrictions as within proprietary powers when

they are targeted at advancing a specific local interest. To date, courts have permitted airport

proprietors to enact regulations aimed at monitoring noise levels, see Santa Monica Airport Ass’n v.

City of Santa Monica, 659 F.2d 100, 104 (9th Cir. 1981), tempering environmental concerns, see

National Helicopter of America, 137 F.3d at 88, and managing congestion, see Western Air Lines Inc.

v. Port Authority of New York and New Jersey, 817 F.2d 222 (2d Cir. 1987). See generally Cross,

17 Transp. L.J. at 106 (“An airport authority’s proprietary function permits it to enact regulations

benefitting citizens who live near the airport, such as airport noise regulations or airport curfews.”).

In each of these cases, the proposed restriction was targeted at alleviating an existing problem at the

13 An airport perimeter rule “establish[es] maximum permissible distances of non-stop flights into and out of a given airport.” See Jonathan Whitman Cross, Airport Perimeter Rules: An Exception to Federal Preemption, 17 Transp. L.J. 101, 102 (1988). The Wright Amendment itself, by allowing interstate service to only the four states bordering on Texas, operates as a perimeter rule. Similarly, because § 9.5 of the Bond Ordinance has been enforced so as to allow the range of flights permitted under the Wright Amendment, it effectively operates as a perimeter rule.

-22- airport or in the surrounding neighborhood. For example, in Western Air Lines, the Second Circuit

upheld a 1,500-mile perimeter rule enacted by the Port Authority at LaGuardia Airport as a reasonable

means both of alleviating congestion at LaGuardia and of preserving the shorthaul status of that

facility. See Western Air Lines, 817 F.2d at 226. More recently, the Second Circuit considered the

validity of a special use permit that imposed significant restrictions on the use of a local heliport. See

National Helicopter Corp. 137 F.3d 81. Finding that the proprietor exception allowed municipalities

only to promulgate “‘reasonable, nonarbitrary and non-discriminatory’ regulations of noise and other

environmental concerns at the local level,” id. at 88, the Second Circuit upheld only the restrictions

that were aimed at reducing noise or other environmental concerns at the heliport. Significantly, the

court struck down the restriction on sightseeing routes, finding that “Congress, the Supreme Court,

and we have consistently stated that the law controlling flight paths through navigable airspace is

completely preempted.” Id. at 92.14

The only case which might support the Fort Worth Petitioners’ view of Dallas’s proprietary

powers at Love Field is Arapahoe County Public Airport v. Centennial Express Airlines, Inc., 956

P.2d 587 (Colo. 1998). To the extent that Arapahoe holds that it is within an airport owner’s

proprietary powers to restrict service at a local airport without articulating a viable purpose for the

restriction, we view that case as deviating from the generally accepted rule that we adopt here. In

Arapahoe, the Colorado Supreme Court—without finding any purpose for the restriction beyond the

proprietor’s bald assertion that it would “strip” the airport Authority “of its ability and authority to

manage the Airport,” see id. at 59—upheld a municipal proprietor’s ban on all passenger service at

Centennial Airport, see id. at 595. We fear that under the rationale of Arapahoe, virtually any regional

regulation enacted by a proprietor would fall within the proprietary powers exception. This would

14 In City of Houston, we touched upon the proprietary rights exception when we upheld the FAA’s authority to enact a 1,000-mile perimeter rule at Washington National Airport. In that case, the FAA enacted the rule as a means of limiting traffic at National, preserving the short-haul status of National, and assuring the utilization of the flagging Dulles Airport nearby. In relying on City of Houston for support, the Fort Worth Petitioners overlook the fact that we explicitly avoided engaging in a full analysis of the preemption provision in that case. Rather, we found that since the ADA preempted state regulation of routes, the restrictions of § 41713 did not apply to the FAA, a branch of the federal government. Thus, our decision in City of Houston does little to advance the Fort Worth Petitioners’ argument.

-23- expand the regulatory role of municipal owners far beyond the “extremely limited role” envisioned by

the ADA.15

We are not persuaded by t he Fort Worth Petitioners’ attempt to fit the restrictions at Love

Field into the existing federal case law defining the scope of proprietary rights. On its face, the

Ordinance is clearly not aimed at alleviating noise, pollution, or congestion at Love Field, nor do the

Fort Worth Petitioners assert such claims. Rather, they extract from Western Air Lines and City of

Houston an overly broad rule that it is within an airport owner’s proprietary powers to allocate traffic

between two airports so as to preserve the shorthaul nature of one facility. Such a contention misses

the import of both cases; that a proprietor can enact a perimeter rule if it articulates a need for the

restriction. The Fort Worth Petitioners seem to overlook the Western Air Lines court’s repeated

emphasis that the primary goal of the restriction was to reduce congestion at LaGuardia, and the

allocation of traffic between LaGuardia and Kennedy Airports was a means of attaining this goal. The

court specifically held that “a perimeter rule, as imposed by the Port Authority to manage congestion

in a multi-airport system, serves an equally legitimate local need and fits comfortably within that

limited role, which Congress has reserved to the local proprietor.” Western Air Lines, 658 F. Supp.

at 958. Similarly, to the extent that City of Houston touched upon the scope of proprietary powers,

we spent the bulk of our opinion emphasizing the fact that allocation of flights between Dulles and

National was necessary to encourage use of Dulles Airport and ameliorate the overuse of National.

See City of Houston, 679 F.2d at 1187. In neither case was re-allocation of flights between airports

a goal in and of itself.

The fact that the restrictions in the Ordinance do not advance a local interest articulated in

prior case law is not dispositive of this issue. We do not limit the scope of proprietary rights to those

15 Arapahoe is also factually distinguishable from the present case. First, while in Arapahoe, the court found that the ban on passenger service did not constitute a restriction on “rates, routes or services” within the meaning of the ADA, the restrictions under the Ordinance clearly amount to route restrictions. Second, the passenger service at issue in Arapahoe had never been permitted at Centennial Airport. In reaching its conclusion, the court emphasized that “[t]he power to control an airport’s size exists at the core of the proprietor’s function and is especially strong where, as here, the prohibited use has never been allowed, or even contemplated.” Arapahoe, 956 P.2d at 595. In contrast, passenger flights on planes of all sizes have long been permitted at Love Field.

-24- which have been previously recognized. Cf. Western Air Lines, 658 F. Supp. at 957 (“Section

1304(b)(1) [recodified as 41713(b)(1)] does not expressly limit proprietary powers to the regulation

of noise, although presumably Congress would have so limited t he section if that is what it had in

mind.”). Thus, we are open to assessing whether the restrictions in the Ordinance are reasonable and

non-discriminatory rules aimed at advancing a previously unrecognized local interest. The Fort Worth

petitioners fail, however, to offer a viable alternative justification for the route limitations that might

support extending the recognized scope of a proprietor’s powers under § 41713(b)(3). To allow

enforcement of the Ordinance under the proprietary powers exception extends that exemption beyond

its intended limited reach.16

In sum, reviewing DOT’s ruling de novo, we affirm the agency’s determination that §

41713(b)(1) of the ADA preempted the Ordinance’s restrictions on operations at Love Field. Clearly,

under the less stringent Chevron review, DOT’s interpretation of the preemption provision would also

be reasonable. Under either standard, DOT’s interpretation is affirmed.17. DOT’s ruling was arguably broader than this, addressing the cities’ ability to regulate any services at Love Field. We limit our analysis to the only question before us, whether the Ordinance is preempted.18

B We next review DOT’s ruling that the Wright Amendment’s “commuter aircraft exemption” authorized carriers

using jets with passenger capacity of 56 seats or less to engage in long-haul service from Love Field to any city in the

United States. DOT ruled and argues on appeal that the “commuter aircraft exemption” imposes no geographical limitation on the service that can be provided with smaller aircrafts and therefore authorizes longhaul service at Love Field with any aircraft with a capacity of less than 57 passengers. Not surprisingly, intervenors Continental Express

and Legend Airlines—each of whom plan to offer longhaul service out of Love Field on regional or reconfigured

16 Finally, we need not reach the question of whether there is a “multi-airport proprietor” requirement in either the case law or the ADA such that a local proprietor can only enact route restrictions that allocate between two airports if it owns both facilities. Since we find that the restrictions at issue here are impermissible regardless of ownership, the issue of whether Dallas controls both Love Field and DFW is irrelevant to our analysis. 17 DOT alternatively ruled that the Wright and Shelby Amendments impliedly preempt the cities’ ability to enforce the Ordinance.

Because we find that the amendments expressly preempt enforcement of the Ordinance, we decline to address this issue here.

-25- jets—agree with this position. The Fort Worth Petitioners contend that DOT misinterpreted the Love Field amendments and that the exemption authorizes only short-haul service at Love Field. Because the DOT is authorized to administer the Wright and Shelby Amendments, see Continental Air Lines,

Inc. v. Dep’t of Transp., 843 F.2d 1444, 1449 (5th Cir. 1988) (“Here, Congress fashioned a specific provision which the agency (once CAB, now DOT) has been called upon to interpret.”), we review its decision under the two-step Chevron

analysis.

This inquiry most logically begins with a review of the statutory text. Subsection (a)(2) of the Wright Amendment exempts from the general ban against interstate flights at Love Field “air transportation provided by

commuter airlines operating aircraft with a passenger capacity of 56 passengers or less.” § 29, 94 Stat. at 48. Section (a) of the Shelby Amendment defines the term “passenger capacity of 56 passengers or less” to include “any aircraft .

. . reconfigured to accommodate 56 passengers or fewer if the total number of passenger seats installed on the aircraft does not exceed 56.” § 377(a), 111 Stat. at 1447. A plain reading of these provisions appears to permit longhaul service

at Love Field on a commuter airline with a passenger capacity of fewer than 57.19 The slightly more complicated issue here is what type of aircraft is covered under the “commuter airline”

exemption. DOT interpreted the commuter airline exemption as applying to any aircraft—whether a “regional jet” or

turboprop plane—with a capacity of 56 passengers or less. Legend and Continental Express agree with this interpretation. The Fort Worth Petitioners, on the other hand, argue that the exemption in subparagraph (a)(2) of the Wright Amendment applies only to “commuter aircrafts” and not to regional jets. These differing views, in addition

to Congress’s failure to define the term “commuter airline,” persuade us that the meaning of that term is ambiguous.

See Continental Air Lines, 843 F.2d at 1454 (“The language of the [commuter airline exemption] is, we are persuaded, ambiguous.”). Consequently, we turn to step two of Chevron and assess the reasonableness of DOT’s interpretation.

The Fort Worth Petitioners contend that DOT erred in failing to interpret the phrase “commuter airline” as

a limitation on the commuter aircraft exemption. As an initial matter, to the extent that American attempts to resurrect the argument that the term “commuter airlines” cannot refer to an air carrier offering longhaul service, we agree with and adopt the rationale of the District of Columbia Circuit in Continental Air Lines. In that case, the court upheld as reasonable DOT’s interpretation of the commuter airlines exemption as restricting the type of aircraft that could operate

unrestricted service at Love Field rather than the class of airlines that could operate longhaul services at the facility.

19 In interpreting the commuter airline exemption in this manner, we keep in mind that Congress enacted the Love Field amendments with the intention of preserving Love Field as a primarily shorthaul facility. Cf. Cramer v. Skinner, 931 F.2d 1020, 1031 (5th Cir. 1991). We are, however, persuaded by DOT’s argument that this interpretation will not undermine Love Field’s status as a primarily short-haul airport since both the Wright and Shelby Amendments still place significant restrictions on the long-haul service permitted on larger jets.

-26- See id. at 1454-55. Fort Worth presents a different argument, namely, that the term “commuter” limits the type of aircraft to the kind of turboprop aircrafts that were in use at the time the Wright Amendment was enacted. Regional jets, it contends,

“cannot qualify as ‘commuter’ aircraft.” We disagree. First, Congress chose not to define “commuter airline” by reference to the kind of planes with a limited passenger capacity in 1979 and we decline to define that term for it here.

Cf. Continental, 843 F.2d at 1454 (“First, Congress might have defined ‘commuter airlines’ with greater specificity by

explicitly incorporating definitional references to agency regulations, but it chose not to do so. We cannot say that Congress meant to incorporate those regulatory definitions absent indications of its intention to do so in the statute or

the legislative history.”). Furthermore, to impose such a definition would essentially penalize those airlines who chose to update their technology as the airline industry advanced over the past twenty years.

Second, the Fort Worth Petitioners’ definition of a “commuter airline” essentially renders the Shelby Amendment meaningless. The City of Fort Worth’s contention that “the Shelby Amendment merely permits the use of

reconfigured jet aircraft if the aircraft otherwise qualifies as a commuter aircraft” is nonsensical since, under its own definition of a “commuter airline,” a reconfigured jet would never qualify as a commuter plane.20 The more rational

view is that the term “operating aircraft with a passenger capacity of 56 passengers or less” as defined by the Shelby

Amendment, defines the term “commuter airlines” so as to include all planes weighing less than 300,000 pounds, including regional jets, with a passenger capacity of less than 57. Thus, our reading of the commuter aircraft exemption leads us to conclude that DOT’s interpretation of the commuter aircraft exemption as permitting carriers using jets with

a 56-passenger capacity to engage in longhaul service at Love Field is reasonable.

C DOT found that, “[f]or the same reasons [the cities could not directly limit services from Love Field], the DFW

Board may not prohibit or limit an airline’s use of a competing airport” through the use agreements. DOT Order 98-12-

27 at 52. Continental Express agrees with this ruling,21 while the DFW Board, Dallas, and Fort Worth argue that the use agreements are not preempted. We again need not decide whether we must defer to DOT’s ruling on this point

20 The Fort Worth Petitioners also argue that DOT’s interpretation violates the agency’s previous ruling that Congress enacted the Wright Amendment in an effort to limit operations at Love Field to shorthaul service. In reality, Congress always permitted limited longhaul service at Love Field. From its inception, the Wright Amendment allowed for limited longhaul service on aircrafts with limited capacity and, as stated above, we do not think that DOT’s ruling will radically alter Love Field’s status as a primarily shorthaul airport. 21 American filed a request to intervene and a request to file an intervenor’s brief that conditionally supports DOT’s ruling on the use agreement issue. Legend subsequently moved to strike American’s proposed intervenor brief. American’s request to intervene is untimely, see Fed. R. App. P. 15(d), and American has not shown that we should treat its proposed intervenor brief as a supplemental brief under 5th Circuit Local Rule 28.5. Accordingly, we DENY American’s motions to intervene and to file a brief as an intervenor and DENY as moot Legend’s motion to strike American’s intervenor brief.

-27- because we would uphold it even if we reviewed it de novo. In determining whether government contracts are subject to preemption, the case law distinguishes between actions a state or municipality takes in a proprietary capacity—actions similar to those a private entity might take—and

actions a state or municipality takes that are attempts to regulate. The former type of action is not subject to preemption while the latter is. For example, in Building & Trades Council v. Associated Builders, 507 U.S. 226, 113 S. Ct. 1190,

122 L. Ed. 2d 565 (1993), the Supreme Court held that a labor contract was not preempted by the National Labor

Relations Act because it was not “government regulation” but rather “constitute[d] proprietary conduct.” Id. at 232, 113 S. Ct. at 1199, 122 L. Ed. 2d at __. More recently, in Cardinal Towing & Auto Repair, Inc. v. City of Bedford,

Texas, 180 F.3d 686 (5th Cir. 1999), we considered whether a municipal ordinance and a contract entered into pursuant to that ordinance were preempted as “law[s], regulation[s], or other provision[s] having the force and effect of law.”

Id. at 691. Analyzing the contract and the ordinance in the same manner, we held that neither was preempted because both were valid exercises of proprietary power rather than impermissible attempts to regulate. See id. at 693-94; see

also Associated Gen. Contractors of America v. Metropolitan Water Dist. of S. Cal., 159 F.3d 1178, 1182-83 (9th Cir. 1998) (holding that labor contracts between a state entity and private groups were not “laws” because they were not

efforts to regulate but rather “reflect[ed] an owner's desire to contractually assure peace and prosperity on particular

projects”). Thus, the critical inquiry here is whether the use agreements represent a valid exercise of the cities’ proprietary powers. This question is easily resolved. The use agreements are essentially coextensive with the Ordinance, indicating

in their breadth an intent to achieve everything achieved by the Ordinance. Cf. Cardinal Towing, 180 F.3d at 694

(looking to the scope of the contract and the activity it covered to determine whether it represented an attempt to regulate). They were enacted to effect the Ordinance, and the most recent version of the agreements directly links the

airlines’ obligations to the terms of the Ordinance: “Airline agrees that it shall conduct its Certificated Air Carrier

Services serving the Dallas/Fort Worth areas to, from and at the Airport, to the extent required by the terms of the 1968 Regional Airport Concurrent Bond Ordinance.”22 Given this overlap, for the same reasons we have already determined that the Ordinance is preempted as an improper attempt to regulate, we must determine that the use agreements are preempted as an impermissible attempt to regulate in an area where the federal government has preempted state

regulation.23 See Skydiving Center of Greater Washington, D.C., Inc. v. St. Mary's County Airport

22 Earlier versions of the use agreements and the original letter agreements contain similar language. 23 Thus, this case is distinguishable from the Supreme Court’s recent decision in Wolens, where the Court addressed a class action by passengers against an airline over changes the airline made to its air-miles program. See Wolens, 513 U.S. at 224-25, 115 S. Ct. at 822, 130 L. Ed. 2d at __. The Court first found that the passengers’ state consumer protection act claims were preempted by federal law, because their claims related to “rates” and “services.”

-28- Comm’n, 823 F. Supp. 1273, 1284 (D. Md. 1993) (finding that when federal law preempted a

municipal corporation’s ban on off-site parachute landings, it also preempted lease provisions between

the corporation and the skydiving center that incorporated this ban by reference).

The parties favoring the use agreements contend that even if the use agreements were

preempted, the signatories waived their preemption rights by voluntarily entering into the agreements.

DOT rejected this argument by finding that any waiver was invalid as violative of public policy. See,

e.g., Brooklyn Sav. Bank v. O'Neil, 324 U.S. 697, 900-01 (1945) (noting “that a statutory right

conferred on a private party, but affecting the public interest, may not be waived or released if such

waiver or release contravenes the statutory policy,” and holding that in the case before it, employees

could not waive their private rights to liquidated damages because of the public interest at stake).

We need not address the waiver issue because we find it inapplicable here. Section 41713 does

not expressly announce affirmative rights for airlines, but instead bars states from regulating in certain

areas. The airline signatories cannot “waive” this preemption because there is no indication that the

federal preemption is limited to granting them individual rights. Cf. Niswonger v. American Aviation,

Inc., 411 F. Supp. 769, 771 (E.D. Tenn. 1975) (holding, without analysis, that “[t]he lease indenture

of June 16, 1969 between American and the authority violates 49 U.S.C. § 1349(a), a statute enacted

for the protection of the public, in so far as it grants American the exclusive right for the use of the

landing area and the air navigation facility at the airport”).

D

Finally, we review DOT’s ruling that the Wright Amendment permits an airline to offer through

See id. at 228, 115 S. Ct. at 823-24, 130 L. Ed. 2d at __. The Court proceeded to find, however, that the plaintiffs could still pursue contractual claims against the airlines because, unlike the consumer protection statute, the contracts were “privately ordered obligations” which “did not amount to a State’s enact[ment] or enforce[ment] [of] any law.” Id. at 228-29, 115 S. Ct. at 824, 130 L. Ed. 2d at __ (quotations omitted) (alterations in original). It based this finding in part on the fact that “[m]arket efficiency requires effective means to enforce private agreements.” Id. at 230. As several of the parties note, Wolens is distinguishable from this case because it did not involve a contract entered into by a state. Instead, the contracting parties in Wolens were private actors. Thus, the only question of state regulation in Wolens was the more tangential question of whether the contract could be enforced in state court. See id. at 229 n.5, 115 S. Ct. at 824 n.5, 130 L. Ed. 2d at __. Additionally, although Wolens referred to the importance of contracts in ensuring “market efficiency,” there has been no convincing showing here that the parties entered into the use agreements for this purpose. Instead, it seems that they entered into the use agreements to implement an agreement between the cities to regulate airport use in the Dallas-Fort Worth area.

-29- service from Love Field to points outside the Love Field service area as long as the airline uses a city

within Texas as a connecting point and a 56-passenger aircraft to get to that point.24 While DOT,

Continental Express, and Legend Airlines argue that we should uphold this ruling, every other party

to this action—Dallas, Fort Worth, the DFW Board, Southwest Airlines, and American

Airlines—contends that permitting an airline to offer through service between Love Field and “the

world” violates both the plain meaning of and the congressional intent behind the Wright Amendment.

Once again, since DOT is charged with administering the Wright Amendment, we review its ruling

under the two-step Chevron analysis. See Texas Oil & Gas Ass’n, 161 F.3d at 937-38.

This issue arose from Continental Express’s decision to offer and advertise through service

between Love Field and “the world.” Continental Express flies passengers from Love Field to

Houston’s Intercontinental Airport on an aircraft with a maximum capacity of 56 passengers and then

transfers them to worldwide flights on large jets. Passengers taking advantage of this service receive

one ticket and, though they must change planes, do not have to reclaim and recheck their luggage at

the connecting point.

As discussed above, subsection (a)(2) of the Wright Amendment excludes from section (a)’s

general prohibition against interstate transportation flights out of Love Field that are operated on an

aircraft with a capacity of 56 passengers or less. Subsection (c) o f the Amendment permits flights

between Love Field and any point in Texas or one of the four contiguous states (later expanded to

seven) on any size aircraft as long as “(1) such air carrier does not offer or provide any through service

or ticketing with another air carrier or foreign air carrier, and (2) such air carrier does not offer for sale

transportation to or from, and the flight or aircraft does not serve, any point which is outside any such

State.” § 29, 94 Stat. at 48.

24 As an initial matter, we clarify the precise issue addressed in DOT’s Declaratory Order. DOT purportedly determined “[w]hether the Wright and Shelby Amendments allow an airline to offer through service from Love Field to points outside the seven-state area within which unrestricted service is permitted, if the airline uses a city within the seven-state area as a connecting point and uses aircraft with no more than 56 seats for its flights between Love Field and the connecting point.” Declaratory Order at 18 (emphasis added); see also DOT Procedural Order at 3 (Sept. 3, 1998). The substance of DOT’s ruling, however, is geared towards the specific service offered by Continental Express and therefore considered solely whether the Love Field amendments permit an airline to offer through service through a point within Texas. We limit the scope of our review to the narrower question actually resolved by DOT.

-30- DOT interpreted subsection (a)(2) as authorizing the service offered by Continental Express.

More specifically, DOT reads the commuter airlines exemption to exempt planes with a passenger

capacity of less than 57 from all restrictions in the Wright Amendment. Under this interpretation, the

restrictions on service in subsection (c)–including the restrictions on through service–do not apply to

aircrafts operating under the commuter airline exemption. In contrast, the Fort Worth Petitioners,

Southwest Airlines, and the City of Dallas contend that DOT’s interpretation violates the plain

language of the Wright Amendment. Under their interpretation of the statute, the restri ctions on

service in subsection (c)(2) apply to both commuter flights under subsection (a)(2) and flights on large

aircrafts.

These two plausible yet conflicting readings of the relevant provisions of the Wright

Amendment, coupled with a lack of legislative history illuminating the proper interaction between

subsections (a)(2) and (c)(2), convince us that Congress did not speak directly to the issue before us.

Accordingly, we move to step two of Chevron and inquire whether DOT’s i nterpretation is a

reasonable one. Under Chevron, an agency’s interpretation is “reasonable” if it is “not patently

inconsistent with the statutory scheme.” See Continental, 843 F.2d at 1452 (citations omitted). We

need not agree with DOT’s interpretation in order to uphold it as reasonable. See Exxon Corp. v.

Lujan, 970 F.2d 757, 761 (10th Cir. 1992) (“The agency’s interpretation need not be the only one it

could have adopted, or the one that this court would have reached had the question initially arisen in

a judicial proceeding.”) (citation omitted).

We are persuaded that DOT’s interpretation of the Wright Amendment is a permissible one

within the meaning of Chevron. DOT grounds its ruling largely on the argument that by imposing an

express restriction on through service on large jets operating under subsection (c)(2) but declining to

impose a similar restriction on commuter planes operating under section (a)(2), Congress was evincing

its intent to permit small aircrafts to fly without such a restriction.25 We view this reading of the

25 Each party opposing DOT’s position argues that it conflicts with the agency’s 1985 Order holding that Continental could not provide interlining service on a large jet through a connecting point in Texas. See Love Field Amendment Proceeding, DOT Order 85-12-81, 1985 WL 57886 (1985). In that interpretive proceeding, DOT

-31- amendment as reasonable and not inconsistent with a statutory scheme aimed at preserving Love Field

as a primarily shorthaul facility while still allowing some longhaul service. See H.R. Conf. Rep. 96-

716, at 24 (1979), reprinted in 1980 U.S.C.C.A.N. 78, 86 (stating that the Wright Amendment

“embodies a compromise which permits limited commercial passenger service in interstate

transportation at Love Field.”).

This is not to say that we find DOT’s interpretation to be the only or the best reading of the

Wright Amendment. In order to reach its decision, DOT necessarily defined “air transportation on 56-

passenger capacity planes” as including air service provided in part by such aircrafts. Similarly, it

implicitly defined intrastate service as including flights with only an intrastate portion. These

interpretations strain the meaning of both terms. Furthermore, we note with concern the potential

impact of DOT’s ruling. While it seems unlikely that permitting interstate service outside of the Love

Field service area on small planes would have any impact on DFW’s role as the Dallas area’s primary

long-haul facility, it seems significantly more likely that following the DOT ruling, airlines who already

operate small aircrafts will commence interlining service connecting in Houston or another Texas

airport. However, determinations of this nature are directly within DOT’s expertise, not ours, and we

will not substitute our judgment on aviation-related issues for their reasonable one. Accordingly, we

affirm DOT’s ruling as a reasonable interpretation of the Wright Amendment.

V

For the foregoing reasons, we DENY the petitions for review and AFFIRM DOT’s orders.

addressed whether airlines could provide interlining service exclusively on large planes. There, DOT essentially agreed with an earlier CAB ruling that an air carrier could not “evade the [Wright] Amendment’s restrictions by providing flights, for example, between Love Field and Houston and then continuing the flights between Houston and points outside the five-state area.” 1985 WL 57886, at *11(citation omitted). We agree with DOT that its previous interpretation can be distinguished on the grounds that DOT premised its earlier order on an interpretation of section (c)(2) of the Wright Amendment, whereas the agency’s decision here relies primarily on an interpretation of section (a).

-32-