Delta Air Lines, Inc. v. Export-Import Bank of U.S.

CourtUnited States District Courts. United States District Court (Columbia)
Citation85 F.Supp.3d 250
Docket NumberCivil Action No.: 13–0192 RC
PartiesDelta Air Lines, Inc., et al., Plaintiffs, v. Export–Import Bank of the, United States, et al., Defendants.
Decision Date30 March 2015

Gregory Gerber Rapawy, Reed Smith LLP, New York, NY, Wan J. Kim, Michael K. Kellogg, Kellogg, Huber, Hansen, Todd & Evans, Figel P.L.L.C., Jonathan Booth Hill, Cooley, LLP, Robert Russell Bailey, David Michael Semanchik, Jonathan Asher Cohen, Air Line Pilots Association, International, Washington, DC, for Plaintiffs.

Jean Lin, Adam Anderson Grogg, Joseph Charles Folio, III, U.S. Department of Justice, Washington, DC, for Defendants.

Re Document Nos.: 14, 43, 44, 50


Granting Defendants' Motion to Dismiss; Denying as Moot Defendants' and Plaintiffs' Motions for Summary Judgment; and Denying as Moot Plaintiffs' Motion to Supplement the Administrative Record

RUDOLPH CONTRERAS, United States District Judge


The Export–Import Bank (“Ex–Im Bank” or “Bank”) is an independent agency established in 1934 as the official export credit agency (“ECA”) of the United States to promote and facilitate U.S. exports by providing loans and loan guarantees to foreign purchasers of U.S.-manufactured goods and services. The U.S. aircraft manufacturing industry is one of many domestic industries that rely on Ex–Im Bank support to compete with foreign manufacturers that receive similar support from foreign ECAs. But while U.S. aircraft manufacturers enjoy the benefits of the Ex–Im Bank's assistance in selling their planes to foreign airline purchasers, U.S. commercial airlines, which are not eligible for financing from the Bank, object to the boost that the Bank's support provides to overseas competitors.

Delta Air Lines, Inc. (Delta), Hawaiian Airlines, Inc. (“Hawaiian”), and the Air Line Pilots Association, International (“ALPA”) (collectively, Plaintiffs) are among those that protest the Ex–Im Bank's support of foreign aircraft purchasers. Together, Plaintiffs have embarked on a multipronged litigation attack against the Ex–Im Bank and its Board of Directors (collectively, Defendants), in which they maintain, among other things, that the Bank has violated the Export–Import Bank Act of 1945 (“Bank Act or “Charter”) and the Administrative Procedure Act (“APA”) through the adoption and application of certain internal economic impact procedures (“EIPs”), which the Bank uses to assess the economic effects of potential transactions within its broader process of determining whether to approve an application for Bank financing.

Specifically at issue in this action—one of three separate lawsuits brought by Plaintiffs currently pending before this Court—is Plaintiffs' challenge to the facial validity of the Ex–Im Bank's 2013 EIPs and Guidelines, which were adopted in November 2012 and became effective on April 1, 2013. The most recent EIPs include, for the first time, specific procedures for analyzing aircraft transactions, whereas prior versions of the EIPs included an “exportable goods screen” that categorically excluded from in-depth economic impact analysis any proposed transaction that would result in the foreign provision of exportable services, such as airline services, rather than the production of an exportable good.

Defendants have filed a motion to dismiss and a motion for summary judgment, and Plaintiffs have filed a motion for summary judgment. Together, these motions raise a variety of issues ranging from Plaintiffs' standing to the Bank's compliance with the Bank Act to the Bank's procedural obligations under the APA. In the end, however, the Court concludes that it must stop short of reaching the merits of Plaintiffs' facial challenge to the new EIPs for two reasons. First, Plaintiffs have not established an imminent injury-in-fact resulting from the Bank's mere adoption of the new guidelines, as is required for standing under Article III. Second, Plaintiffs' challenge is not ripe because the claims are unfit for judicial review, and in the meantime, Plaintiffs have not demonstrated that they will suffer any sufficient hardship while judicial review is delayed. Thus, upon consideration of the parties' motions and the memoranda in support thereof and opposition thereto, the Court will grant Defendants' motion to dismiss and deny the remaining motions as moot.

A. Statutory Framework: The Ex–Im Bank And The Bank Act

The Ex–Im Bank is an independent federal agency and corporation that has its origins in a 1934 Executive Order issued by then-President Franklin Roosevelt. See Exec. Order No. 6581 (Feb. 2, 1934). The Bank assumed its current form with the passage of the Bank Act, ch. 341, 59 Stat. 526, which, as amended and codified at 12 U.S.C. § 635 et seq., remains the Bank's governing Charter. The Bank Act declares that [t]he Bank's objective in authorizing loans, guarantees, insurance, and credits shall be to contribute to maintaining or increasing employment of United States workers.” 12 U.S.C. § 635(a)(1). “In connection with and in furtherance of its objects and purposes, the Bank is authorized and empowered to do a general banking business,” including “to guarantee, insure, coinsure, and reinsure against political and credit risks of loss.” Id. Loans and loan guarantees issued by the Ex–Im Bank carry the full faith and credit of the United States government, id. § 635k, and Congress has reauthorized the Bank on more than twenty occasions since 1947.1

The Bank Act identifies many policy concerns for the Bank to take into consideration when deciding whether to approve an application for financing support. In particular, the statute requires the Bank to “give particular emphasis to the objective of strengthening the competitive position of United States exporters and thereby of expanding total United States exports.” Id. § 635(b)(1)(B)(ii). The statute also declares that it is “the policy of the United States that loans made by the Bank in all its programs shall bear interest ... at rates and on terms and conditions which are fully competitive with exports of other countries, and consistent with international agreements.” Id. § 635(b)(1)(B). In addition, the Bank must work with other ECAs to “minimize competition in government-supported export financing.” Id. § 635(b)(1)(A).

In requiring the Ex–Im Bank to be competitive, Congress has emphasized that the Bank must process financing applications efficiently and with flexibility, so as not to cause a U.S. exporter to lose an export opportunity. See id. § 635(b)(1)(B) (the Bank's loans should “neutralize the effect of ... foreign credit on international sales competition”); see also S.Rep. No. 99–274, at 8 (1986) (recognizing “the need for [the Bank] to respond to exporters' requests for support in a timely ... fashion”); id. (noting that the adverse economic impact provision of the Bank Act “should be implemented in a way that does not reduce the Bank's competitiveness and flexibility in assisting U.S. exporters nor ignore the positive aspects of the export sale”).

The Bank Act also contains several provisions requiring the Bank and its Board of Directors (“Board”) to take into account potential serious adverse effects on U.S. industry and employment when considering a proposed transaction. For example, in 1978 Congress amended the Bank Act to include the provision now codified at 12 U.S.C. § 635a–2, which calls on the Bank to “implement such regulations and procedures as may be appropriate to insure that full consideration is given to the extent to which any loan or financial guarantee is likely to have an adverse effect on industries[.] Id. ; see Pub.L. No. 95–630, § 1911, 92 Stat. 3641, 3726 (1978).

The Bank Act also provides, among other things, that the Bank may not extend a financial guarantee for the “production of any commodity for export by any country other than the United States” if the Board determines that (i) the commodity is likely to be in surplus on world markets at the time the resulting commodity will first be sold; or (ii) the resulting production capacity is expected to compete with United States production of the same, similar, or competing commodity.” 12 U.S.C. § 635(e)(1). Such a limitation does not apply, however, when the Board determines that the “short- and long-term benefits to industry and employment in the United States are likely to outweigh the short- and long-term injury to United States producers and employment of the same, similar, or competing commodity.” Id. § 635(e)(3). Section 635(e), moreover, provides that [i]f ... the Bank conducts a detailed economic impact analysis or similar study,” it must provide notice and obtain comments on the potential economic effects of the financing support. Id. § 635(e)(7)(B)(i). Under this provision, the Bank must consider certain factors when conducting a detailed economic analysis. See id. § 635(e)(7)(A).

B. Litigation History: ATA And Delta I

Before addressing the lawsuit that presently is before the Court, it is helpful to provide context and some relevant procedural history regarding the broader litigation battle being waged against Defendants by members of the U.S. airline industry. This litigation started in 2011, when the Air Transport Association of America, ALPA, and Delta challenged the Bank's loan guarantee commitments for Air India's purchase of certain Boeing aircraft, which the Bank reviewed under its 2007 EIPs. See generally Air Transp. Ass'n of Am. v. Export–Import Bank (“ATA ”), 878 F.Supp.2d 42 (D.D.C.2012). The 2007 EIPs considered, as a categorical screen, whether the proposed transaction would result in the foreign production of an exportable good; if it did not, the transaction was not subjected to further in-depth economic impact analysis. See id. at 71. Because the Bank deems aircraft transactions to result in the foreign provision of a service (i.e. , airline seats) and not the production of an exportable good, such...

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