AMERICAN AIRLINES, INCORPORATED; CITY OF DALLAS, TEXAS; SOUTHWEST AIRLINES COMPANY; LOVE FIELD CITIZENS ACTION COMMITTEE, Petitioners, v. DEPARTMENT OF TRANSPORTATION, Respondent. THE CITY OF FORT WORTH; DALLAS-FORT WORTH INTERNATIONAL AIRPORT BOARD, Petitioners, v. DEPARTMENT OF TRANSPORTATION, Respondent.
No. 99-60008, No. 99-60239
UNITED STATES COURT OF APPEALS, FIFTH CIRCUIT
February 1, 2000
Revised February 24, 2000
202 F.3d 788
DUHE, BARKSDALE, and EMILIO M. GARZA, Circuit Judges.
Petitions for Review of an Order of the U.S. Department of Transportation
EMILIO M. GARZA, Circuit Judge:
I
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.
A
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 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
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 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.” See
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 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 from 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 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
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 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
1
Several parties contend that DOT failed to provide them with sufficient notice as required under
DOT issued its declaratory order after conducting an informal adjudication, pursuant to its authority under
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
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
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
2
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
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 (collectively “Fort Worth petitioners“) ask us to reverse DOT‘s action because (1) DOT violated the full faith and credit statute,
1
The full faith and credit statute,
The Supreme Court adopted this plain reading of
Finding that
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 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);
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 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
2
The Fort Worth Petitioners also argue that DOT‘s actions violated the Anti-Injunction Act,
As a federal agency, DOT‘s proceedings are exempt from the terms of
Fort Worth‘s authority to the contrary is unavailing. The case before us is clearly distinguishable from United Credit Bureau of America, Inc. v. National Labor Relations Board, 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 541.10 In United Credit, the NLRB ordered a party to dismiss a state court 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 541 (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 interpretation 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 competent 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.”
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 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.
A
We first turn to DOT‘s ruling that the preemption provision of the Airline Deregulation Act (“ADA“),
1
The ADA includes an express preemption provision,
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 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 (1994). 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, 115 S. Ct. 817, 824, 130 L. Ed. 2d 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
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
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.
The restrictions on service at Love Field under the Ordinance appear to operate as limitations “relating to . . . routes” within the meaning of
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 “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
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 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 expand the regulatory role of municipal owners far beyond the “extremely limited role” envisioned by the ADA.15
We are not persuaded by the 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 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 the 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
In sum, reviewing DOT‘s ruling de novo, we affirm the agency‘s determination that
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 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 57.18
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, Southwest, 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. 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.19 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,20 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 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. 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.”21 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.22 See Skydiving Center of Greater Washington, D.C., Inc. v. St. Mary‘s County Airport 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.
D
Finally, we review DOT‘s ruling that the Wright Amendment permits an airline to offer through 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.23 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) of 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.
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 restrictions 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 interpretation 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.24 We view this reading of the 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.
Notes
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. 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.” See id. at 228, 115 S. Ct. at 823-24. 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 (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.
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.