City of St. Louis v. Department of Transp., s. 91-1244

• Citation: 936 F.2d 1528
• Decision Date: 27 August 1991
• Docket Number: 91-1916,Nos. 91-1244,s. 91-1244
• Parties: CITY OF ST. LOUIS, Petitioner, v. DEPARTMENT OF TRANSPORTATION, Respondent; American Airlines, Inc., Intervenor. CITY OF ST. LOUIS; Airline Pilots Association, International; Independent Federation of Flight Attendants; and International Association of Machinists and Aerospace Workers, Petitioners, v. DEPARTMENT OF TRANSPORTATION, Respondent; American Airlines, Inc., Trans World Airlines, Inc., and USAir, Inc., Intervenors.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 1528

936 F.2d 1528

60 USLW 2073

CITY OF ST. LOUIS, Petitioner, v. DEPARTMENT OF TRANSPORTATION, Respondent;

American Airlines, Inc., Intervenor.

CITY OF ST. LOUIS; Airline Pilots Association,

International; Independent Federation of Flight

Attendants; and International

Association of Machinists and Aerospace Workers, Petitioners, v. DEPARTMENT OF TRANSPORTATION, Respondent;

American Airlines, Inc., Trans World Airlines, Inc., and

USAir, Inc., Intervenors.

Nos. 91-1244, 91-1916.

United States Court of Appeals,

Eighth Circuit.

Submitted May 31, 1991.

Decided June 28, 1991.

Rehearing and Rehearing En Banc

Denied Aug. 27, 1991.

Edward J. Hanlon, St. Louis, Mo., and Susan B. Jollie, Washington, D.C. (argued), Gary Green, Russell Bailey, Jerry Anker, Anita M. Mosner, Allison Beck, Mark Schneider, Washington, D.C. and Julian L. Bush, St. Louis, Mo., on brief, for petitioners.

Paul M. Geier, Washington, D.C., and Joe Sims, Washington, D.C. (argued), James F. Rill, Robert B. Nicholson, David Seidman, Mary B. Reed, Thomas L. Ray, Alexander J. Millard, Washington, D.C., on brief, for appellee.

Richard A. Rothman (argued), Ira M. Millstein and Gloria C. Phares, New York City, and Peter D. Isakoff and Annemargaret Connolly, Washington, D.C., Weil, Gotshal & Manges, on brief, for American Airlines.

Before ARNOLD, JOHN R. GIBSON and BEAM, Circuit Judges.

ARNOLD, Circuit Judge.

In this case we have before us for review two orders of the Department of Transportation approving the sale of foreign airline routes by Trans World Airlines, Inc. (TWA), to American Airlines, Inc. (American). In No. 91-1244, the order being challenged, Department of Transportation (DOT) Order 91-1-72, was issued in docket number 46752 on January 30, 1991. It approves the transfer from TWA to American of TWA's Chicago-London route authority. In No. 91-1916, the order being challenged is Department of Transportation Order 91-4-47, issued in docket number 47320 on April 24, 1991. This order approves the transfer of three London routes, those originating in New York, Boston, and Los Angeles. The order with respect to the Chicago route became effective on January 31, 1991. The order with respect to the other three routes is scheduled to become effective on July 1, 1991. The City of St. Louis is the sole petitioner challenging the Chicago order. The other order is attacked by the City of St. Louis and three labor organizations representing employees of TWA.

This matter first came to our attention when the City of St. Louis and the other petitioners in No. 91-1916 applied to us for an emergency stay. The transaction transferring the New York, Boston, and Los Angeles-to-London routes, they said, was about to be closed, and a stay was necessary to preserve the status quo during our review of the order. On May 7, 1991, we denied the stay. The transaction had already been closed as between TWA and American. At the same time, however, we expedited the petition for review and set the case for oral argument in St. Louis on May 31, 1991, in order to be in a position to make a decision on the merits of the petition before July 1, when the route transfer was to become effective under the terms of the action taken by DOT. Later, we consolidated the Chicago petition with the New York-Boston-Los Angeles petition, and interested airlines were allowed to intervene.

Having now heard the oral argument and studied the briefs and records, we conclude that we have no authority to set aside either order. DOT's findings of fact are supported by substantial evidence. Its holding that both transfers are in the "public interest," Sec. 401(h) of the Federal Aviation Act of 1958, as amended, 49 U.S.C.App. Sec. 1371(h), rests upon reasonable (and therefore permissible) interpretations of the various statutes involved. And its weighing of the various statutory ingredients of the "public interest" is not so far out of balance as to be arbitrary, capricious, or an abuse of discretion. Accordingly, the two orders under review are affirmed.

I.

We briefly summarize the facts, leaving certain relevant details to those portions of the opinion that deal with particular arguments. TWA has held certificates, issued either by DOT or its predecessor agency, the Civil Aeronautics Board, authorizing it to serve London from Chicago, St. Louis, New York, Boston, Philadelphia, Baltimore, and Los Angeles. American has been serving London, under the authority of similar certificates, from Dallas-Fort Worth and Miami. The hub of TWA's domestic system is St. Louis. American has hubs at Chicago, Nashville, and other cities. The United States-United Kingdom market is also served by British carriers, including British Airways and Virgin Atlantic. British Airways serves London from five of the seven United States cities served by TWA. Historically, Pan American World Airways and TWA were the only two United States-flag passenger carriers allowed to use Heathrow Airport, the closest and therefore most desirable airport serving London. Pan American's certificates have recently been transferred to United Airlines.

In December of 1989, TWA agreed to sell its Chicago-London route authority to American for about 110 million dollars. TWA and American filed an application with DOT for approval of the transfer under Sec. 401(h). Under this statute, "[n]o certificate may be transferred unless such transfer is approved by the Board [now the Department of Transportation] as being consistent with the public interest." Sec. 401(h)(1), 49 U.S.C.App. Sec. 1371(h)(1). Then, in December of 1990, while the Chicago transfer application was still pending, TWA agreed to sell to American its six other London routes and certain other property for about 500 million dollars. DOT did not hold an oral evidentiary hearing. Instead, after reviewing the pleadings, it issued a show-cause order in the Chicago case. This order (91-1-12), issued on January 8, 1991, indicated a tentative disposition to approve the transfer and invited interested parties to comment. The City of St. Louis, among others, filed comments opposing the transfer. (The City had not previously participated in the Chicago proceeding.) In addition, the City asked that the two proceedings be consolidated. On January 30, 1991, the Department rejected the objections to the Chicago transfer, and it became effective the next day, January 31, 1991.

In the meantime, the other case, involving TWA's remaining six London routes, was proceeding separately. As in the Chicago case, DOT proceeded by way of a show-cause order. The order (No. 91-3-28), entered on March 14, 1991, indicated a tentative decision to approve the application in part only. The New York, Boston, and Los Angeles route transfers would be approved, but TWA would keep its St. Louis-London authority, and the Philadelphia and Baltimore routes would be transferred to another carrier. The City of St. Louis and three unions representing TWA employees, Airline Pilots Association, International, the International Federation of Flight Attendants, and the International Association of Machinists and Aerospace Workers, filed comments opposing the tentative decision indicated in the show-cause order. DOT considered these comments, again without an oral evidentiary hearing, and, in an order entered on April 24, 1991, rejected them. This order diverged somewhat from the tentative decision contained in the show-cause order. It approved the transfer to American of the New York, Boston, and Los Angeles routes, but provided that TWA would keep not only its St. Louis authority, but also the Baltimore and Philadelphia-to-London routes.

These two decisions are now before us for review.

II.

The Department of Transportation's first line of defense is that the petitioners have no standing, in the Article III sense, to challenge these orders. Therefore, DOT says, the petitions should be dismissed for want of jurisdiction. The Department correctly points out that the mere fact that petitioners were parties in the agency proceeding is not dispositive of the issue of standing for purposes of invoking the jurisdiction of a federal court. Agencies are not Article III creatures, and Congress may allow anyone it wishes, including members of the public at large, to become parties in agency proceedings. When the case gets to court, though, the courts must independently satisfy themselves that the Article III requirement that a case or controversy be presented is satisfied. DOT also correctly states the standard which we must apply: parties seeking review must show an injury resulting from the challenged agency decision, and that the lawsuit is likely to redress the injury. Valley Forge Christian College v. Americans United for Separation of Church and State, 454 U.S. 464, 475, 102 S.Ct. 752, 760, 70 L.Ed.2d 700 (1982).

The word "show" in this formulation must be understood in a special way, however. If it means that full proof, on the merits, must demonstrate injury to a complaining party, failing which the proceeding must be dismissed for lack of jurisdiction, the question whether threshold jurisdictional requirements have been met will not be decided, in many instances, until the court has investigated and determined the merits of the case exactly as it would if it had jurisdiction. Jurisdictional requirements, as a rule, are better determined at the outset, so that, if they are not met, the court can dispose of the case and turn its attention to matters it has power to deal with. Thus, in the context of standing, it is the nonfrivolous claims of a party that are determinative, not whether the party can sustain those claims by proof on the merits. As the Supreme Court said in Warth v. Seldin, 422 U.S. 490, 501, 95 S.Ct. 2197, 2206, 45 L.Ed.2d 343 (1975), "both the trial and reviewing courts must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party." If...