City of Dallas, Texas v. Southwest Airlines Company

• Citation: 371 F. Supp. 1015
• Decision Date: 21 June 1973
• Docket Number: No. CA 3-5927-C.,CA 3-5927-C.
• Parties: The CITY OF DALLAS, TEXAS et al., Plaintiffs, v. SOUTHWEST AIRLINES COMPANY, Defendant, Texas Aeronautics Commission, Intervenor Defendant.
• Court: U.S. District Court — Northern District of Texas

371 F. Supp. 1015

The CITY OF DALLAS, TEXAS et al., Plaintiffs, v. SOUTHWEST AIRLINES COMPANY, Defendant Texas Aeronautics Commission, Intervenor Defendant.

No. CA 3-5927-C.

United States District Court, N. D. Texas, Dallas Division.

June 21, 1973.

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N. Alex Bickley, City Atty., Dallas, Tex., for Dallas.

S. G. Johndroe, Jr., City Atty., Fort Worth, Tex., for Fort Worth.

Lee E. Holt, Asst. City Atty. (Leg. counsel by assignment), Arlington, Tex., for Board.

John L. Hauer, Robert E. Goodfriend, Michael Caolo, Jr., Akin, Gump, Strauss, Hauer & Feld, Dallas, Tex., and Herbert D. Kelleher, John T Behrendt, Oppenheimer, Rosenberg, Kelleher & Wheatley, Inc., San Antonio, Tex., for Southwest.

John L. Hill, Atty. Gen. of Tex., Rex H. White, Jr., Asst. Atty. Gen., Austin, Tex., for Texas Aeronautics.

MEMORANDUM OPINION

WILLIAM M. TAYLOR, Jr., Chief Judge.

This case involves the right of access of Southwest Airlines Co. (hereinafter sometimes referred to as "Southwest") to Love Field, a public airport owned and operated by the City of Dallas, Texas. Plaintiffs, the City of Dallas, the City of Fort Worth, and the Dallas-Fort Worth Regional Airport Board, seek a declaratory judgment, pursuant to 28 U. S.C. Sec. 2201, declaring their right under federal and state law to exclude Southwest, a purely intrastate air carrier, from Love Field on and after the opening of the new Dallas-Fort Worth Regional Airport. The Regional Airport, which is scheduled to open in the fall of 1973, is a joint undertaking by the Cities of Dallas and Fort Worth, each of which presently owns and operates its own airports. Plaintiff, the Regional Airport Board, is an administrative body, created by contract and agreement between the cities, to which the cities have delegated certain operating powers over the Regional Airport. In conjunction with their joint effort on the Regional Airport, the Cities of Dallas and Fort Worth have covenanted to phase-out all Certificated Air Carrier Services (as defined in their 1968 Concurrent Bond Ordinance) at their respective wholly owned airports, including Love Field, to the extent that they may legally do so, and to transfer such services to the new Regional Airport upon its completion.

Defendant, Southwest, has answered and counterclaimed against the Cities and the Regional Airport Board seeking, pursuant to 28 U.S.C., Sec. 2201 and Sec. 2202, a declaration of its right under federal and state law to remain at Love Field and an injunction to protect that right. The Texas Aeronautics Commission (hereinafter sometimes referred to as the "TAC"), the state agency charged with the economic regulation of intrastate air carriers, has intervened as a Defendant in this case, adopting the contentions of Southwest Airlines and specifically urging that the attempted ouster of Southwest from Love Field usurps the TAC's exclusive regulatory power over intrastate air carriers; is invalid under state law; and is contrary to, and beyond the scope of, the powers delegated to Texas Home Rule cities by the State of Texas.

Jurisdiction in this case is founded on the existence of a Federal question and the amount in controversy, 28 U.S.C., Sec. 1331; on an act of Congress regulating commerce, 28 U.S.C. Sec. 1337; on 28 U.S.C., Sec. 1343(3) and (4); and on the pendent jurisdiction of the Court. The Federal causes of action arise under the Federal Aviation Act of 1958, 49 U. S.C., Sec. 1301 et seq.; the Civil Aeronautics Act of 1938, 49 U.S.C., Sec. 401 et seq.; the Airport and Airways Development Act of 1970, 49 U.S.C., Sec. 1701, et seq.; the Federal Airport Act, 49 U. S.C., Sec. 1101, et seq.; 42 U.S.C., Sec. 1983 and Sec. 1985(3); and the Fifth and Fourteenth Amendments to the United States Constitution. The state causes of action are based on the Texas Aeronautics Act, Art. 46c-1 et seq., Vernon's Ann.Civ.St.; on the Municipal Airports Act, Art. 46d-1 et seq., V.A.C. S.; and on the Texas Constitution. The state causes of action are based on a common nucleus of operative fact with the Federal causes of action.

For many years the Cities of Dallas and Fort Worth were engaged in a fierce, intense and sometimes bitter rivalry for the business of commercial aviation and commercial air carriers. Dallas enlarged and improved its Love Field, which is approximately five to six miles north-northwest of the downtown business district of the City and Fort Worth, rather than undertaking the enlarging and improving of its inadequate Meacham Field, which is approximately five to six miles north of downtown Fort Worth, constructed a fine large airport, now known as Greater Southwest International Airport (GSIA), midway between the two cities. The downtown business districts of Dallas and Fort Worth are about 31 miles apart, and the two cities with the passage of time have grown, extended their limits, and in some places are almost contiguous. Only 12 miles separate Love Field and GSIA. Serving two airports which were so close together resulted in unnecessary expense to the carriers as well as the taxpayers and inadequate and incomplete air service to both cities. Happily, the two cities have now joined hands and are well on the way to the construction of what promises to be the finest airport in the world. The two cities joined together in the bringing of this lawsuit. This congenial alliance was not exactly the result of a shotgun wedding but more than a gentle nudge was provided by the Federal Government's Civil Aeronautics Board, hereinafter sometimes referred to as CAB, which in August of 1962 instituted an investigation known as the Dallas-Fort Worth, Texas Regional Airport Investigation, Docket No. 13959, for the purpose of determining whether or not the certificates of public convenience and necessity of interstate airlines under the CAB's jurisdiction should be amended so as to designate a specific airport as the single point through which all interstate air carrier service to Dallas and Fort Worth must be provided. Finally, after many hearings, the CAB in 1964 entered an interim order giving the two cities a period of 180 days in which to arrive at a voluntary agreement to designate the single airport through which the CAB-regulated carriers would serve the Dallas-Fort Worth area. It indicated that if the parties were unable to agree on the designation of the airport to serve the area, it would then proceed to issue a final determination and amend the certificates of the interstate "air carriers" under its jurisdiction so as to cause them to serve either Love Field or Fort Worth's GSIA. The CAB has entered no further orders in the investigation and none of the certificates of the carriers under CAB jurisdiction have been amended.

Rather than designating an existing municipal airport to serve the Dallas-Fort Worth area, the cities agreed to construct and operate a new regional airport to be located approximately midway between Dallas and Fort Worth at Grapevine, Texas. Thereafter, on November 11 and 12, 1968, the cities jointly adopted the 1968 Regional Airport Concurrent Bond Ordinance authorizing the issuance of Dallas-Fort Worth Regional Airport Joint Revenue Bonds for the financing of the new airport. The 1968 Ordinance provides, among other things, that the cities:

". . . shall take such steps as may be necessary, appropriate and legally permissible (without violating presently outstanding legal commitments or covenants prohibiting such action), 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 Regional Airport effective upon the beginning of operations at the Regional Airport." Section 9.5.

The Ordinance also provides, in Section 9.5, for a waiver of the phase-out provision if eight (8) members of the eleven (11) member Regional Airport Board determine that a waiver is necessary "(1) in the interest of the public safety; (2) in the interest of prudent and efficient operations at the Regional Airport; or (3) in the interest of satisfying an overriding public need for decentralized Certificated Air Carrier Services in the Dallas-Fort Worth metropolitan region considered as a whole." In addition, the Ordinance specifies that if the grant of a waiver by the Regional Airport Board results in a reduction in Regional Airport revenues, the city benefiting from the waiver must pledge to transfer back to the Regional Airport such amount as will justly compensate such Airport for its loss of revenue.

In early 1970, in order to insure that sufficient revenues would be available to maintain and operate the Regional Airport and to meet all debt service requirements on the Airport Revenue Bonds, the Regional Airport Board executed Letters of Agreement with the eight (8) CAB certificated air carriers then serving the Dallas-Fort Worth area.¹ These letter agreements provide that each signatory airline will ". . . move all of its Certificated Air Carrier Services serving the Dallas-Fort Worth area to the Airport . . . to the extent required under the terms of the 1968 Regional Airport Concurrent Bond Ordinance." Each of the CAB carriers also contracts "to pay rentals, fees and charges for its use, operations and occupancy of the Airport premises and facilities and the services appertaining thereto in an amount which, together with the rentals, fees and charges paid by other Airlines and others using the Airport premises and facilities, will be sufficient to produce total gross revenues required to satisfy the Airport Board's obligation . . ." to collect each year monies sufficient to maintain and operate the Airport, plus 1.25 times the debt service requirements on the Regional Airport revenue bonds, and plus an amount equal to any other obligations required to be paid from the revenues of the Airport.

On June 18, 1971, after...