Western Air Lines v. Port Auth. of NY & NJ

• Decision Date: 03 September 1986
• Docket Number: No. 86 Civ. 6259 (JMC).,86 Civ. 6259 (JMC).
• Citation: 658 F. Supp. 952
• Parties: WESTERN AIR LINES, INC., Plaintiff, v. PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Defendant.
• Court: U.S. District Court — Southern District of New York

658 F. Supp. 952

WESTERN AIR LINES, INC., Plaintiff, v. PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Defendant.

No. 86 Civ. 6259 (JMC).

United States District Court, S.D. New York.

September 3, 1986.

Roger M. Deitz, New York City, for plaintiff.

Patrick J. Flavey, New York City (Arthur P. Berg, Jay Adlai Selcov, of counsel), for defendant.

OPINION

CANNELLA, District Judge:

After a nonjury trial on the merits, plaintiff's claims for preliminary and permanent injunctive relief are dismissed. Fed.R. Civ.P. 65(a)(2).

FACTS

Plaintiff Western Airlines "Western" brings this action against defendant Port Authority of N.Y. & N.J. "Port Authority" or "Port", seeking preliminary and permanent injunctive relief against enforcement by the Port of its so-called perimeter rule. The undisputed facts are as follows.

Western is the holder of several slots at LaGuardia Airport "LaGuardia". Each slot permits Western to conduct one landing or takeoff operation during a 30-minute period. Western obtained these slots in a lottery conducted by the Federal Aviation Administration "FAA" on March 27, 1986 and will lose them unless it commences service at LaGuardia by September 17, 1986.

Western maintains its hub in Salt Lake City. The hub permits the airline to serve city pairs by one stop or connecting flights when such city pairs cannot be served economically on a point-to-point nonstop basis. Western intended to begin operating three daily nonstop flights in each direction between LaGuardia and Salt Lake City on September 3, 1986.

The Port Authority operates Kennedy International Airport "Kennedy", LaGuardia, and Newark International Airport "Newark". Since the late 1950's, the Port has had a perimeter rule at LaGuardia, which forbids airlines using LaGuardia to run nonstop flights beyond a set distance. The stated purpose of the rule is to reduce ground congestion and maintain LaGuardia as a short and medium haul airport by diverting longer haul air traffic to Kennedy and Newark. Of the three airports operated by the Port, LaGuardia is the smallest with 662 acres, followed by Newark with 2300 acres, and Kennedy with 4930 acres. Neither Newark nor Kennedy is subject to a perimeter restriction.

Prior to 1984, the perimeter rule at LaGuardia was an informal one, prohibiting most international operations, and nonstop operations in excess of 2000 miles. In 1984, the Port Authority set in place a formal rule, which reduced the permissible distance for nonstop operations to 1500 miles. The new rule does permit flights to Denver, although Denver is more than 1600 miles from LaGuardia. According to the Port Authority, Denver was "grandfathered" under the new rule because there had been continuous nonstop service between LaGuardia and Denver since 1981 and that service accounted for a significant portion of LaGuardia operations. At the time the rule was adopted, three air carriers operated LaGuardia-Denver service.

Salt Lake City is located almost 2000 miles from LaGuardia. Western now serves Salt Lake City with two daily round-trip flights at Kennedy. Because Western believes that LaGuardia serves a lucrative business market, it has sought permission from the Port Authority, in May 1985 and again in early 1986, to conduct New York-Salt Lake City operations from LaGuardia. The Port has denied permission on the basis of the perimeter rule.

In this action, Western alleges that the perimeter rule violates various federal aviation statutes¹ and the Civil Rights Act of 1871,² and is invalid under the Supremacy,³ Equal Protection,⁴ Due Process,⁵ and Commerce⁶ clauses of the United States Constitution. On August 19 and September 2, 1986, the Court held a full hearing on the merits, consolidating plaintiff's claims for preliminary and permanent injunctive relief pursuant to Fed.R.Civ.P. 65(a)(2). For reasons that follow, Western's claims are dismissed.

DISCUSSION

Western's principle contentions center on three federal aviation statutes: Section 105(a)(1) of the Deregulation Act, 49 U.S.C. § 1305(a)(1) "Section 1305(a)(1)"; the Airport & Airway Improvement Act, 49 U.S.C. § 2210 "Section 2210"; and the Federal Aviation Act of 1958, 49 U.S.C. § 1349(a) "Section 1349(a)". Section 1305(a)(1) is a preemption statute. It provides:

No State or political subdivision thereof and no interstate agency or other political agency of two or more States shall enact or enforce any law, rule, regulation, standard, or other provision having the force and effect of law relating to rates, routes, or services of any air carrier having authority under subchapter IV of this chapter to provide air transportation.

Sections 2210 and 1349(a) respectively require that an airport proprietor receiving federal funds (1) make its facilities available to the public on fair and reasonable terms and without unjust discrimination, and (2) not grant to any air carrier an exclusive right to use the facilities.

Western contends that the perimeter rule violates Section 1305(a)(1) and thus the Supremacy Clause because the rule is a regulation of Western's "routes and services". Western also argues that the rule impermissibly discriminates against Western in violation of the Commerce Clause and Sections 2210 and 1349(a) because it permits flights to Denver but not to Salt Lake City. Finally, Western asserts that the rule places an undue burden on interstate commerce.⁷

The Port Authority argues that Western has failed to state a cause of action. It points to Montauk-Caribbean Airways v. Hope, 784 F.2d 91 (2d Cir.1986), which held that neither Section 1305(a)(1) nor 1349(a) confers a private right of action, and implied the same for Section 2210.⁸ Western claims that even if it has no private action under the statutes it may still sue to invalidate the perimeter rule under the Supremacy Clause. In this respect, Western maintains, the statutes demonstrate the preemptive force of federal legislation in the area of aviation. The Port Authority responds that such an argument merely circumvents the rule in Montauk and, if adopted, would render that decision meaningless.

The Court finds the Port Authority's argument unpersuasive and contrary to the Montauk decision itself. In Montauk, the plaintiff sought to operate as a fixed-base operator and air carrier on a year-round basis at an airport owned by the Town of East Hampton. Pursuant to a lease with the Town, the plaintiff was limited to seasonal operations. Plaintiff sought to modify the lease but the Town denied its request. Plaintiff then challenged the Town's actions both under the federal aviation statutes at issue here and on antitrust grounds.

The district court dismissed the complaint. On appeal, the Second Circuit rejected the claims under the Sherman Act. The court reasoned that N.Y.Gen.Mun.Law § 352, which permits municipal airport operators to enter into exclusive lease arrangements, constitutes a clearly expressed state policy authorizing municipalities to pursue anticompetitive activity. Consequently, the court held, the Town was immune from the antitrust challenge by virtue of the state action doctrine.

The plaintiff then argued that Section 1305(a) preempted state law in this area and thus there was no state authorization for the anticompetitive activity. The court rejected this argument, but on the merits, holding that the Town's actions fit an exception to Section 1305(a) preemption. See 784 F.2d at 96-97. The court therefore drew a distinction between a Supremacy Clause challenge and a private right of action. See also New York Airlines v. Dukes County, 623 F.Supp. 1435 (D.C. Mass.1984) (distinguishing private cause of action from a Supremacy Clause challenge).

This Court concludes that Montauk does not foreclose Western's Supremacy Clause challenge to the extent that it relies on Section 1305(a)(1) preemption. However, the Court finds no support for such a challenge in Sections 1349(a) or 2210. Unlike Section 1305(a)(1), which renders void as preempted any regulation affecting "routes or services" not contemplated by that section, Sections 1349(a) and 2210 merely impose obligations on airport proprietors.⁹ Although these sections may have some relevance in demonstrating the extent of federal preemption,¹⁰ Western's attempt to establish a violation of these sections amounts to a private right of action, which is not permitted.

Turning to Western's Supremacy Clause challenge, Section 1305(a)(1), as previously noted, establishes federal preemption in the field of "rates, routes and services" of air carriers. The Port Authority's perimeter rule may be fairly characterized as a regulation touching this area and the Port advances no significant arguments to the contrary. The Port does argue that its perimeter rule is nonetheless valid under Section 1305(b)(1), 49 U.S.C. § 1305(b)(1) "Section 1305(b)(1)", which provides:

Nothing in subsection (a) of this section shall be construed to limit the authority of any State or political subdivision thereof or any interstate agency or other political agency of two or more States as the owner or operator of an airport served by any air carrier certificated by the Board to exercise its proprietary powers and rights.

The extent of "proprietary powers and rights" has not as yet been established. 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." 124 Cong.Rec. 18799 (remarks of Sen. Kennedy). The issue has most frequently arisen in the context of noise regulations.

In City of Burbank v. Lockheed Air Terminal, 411 U.S. 624, 93 S.Ct. 1854, 36 L.Ed.2d 547 (1973), the Court struck down a municipal ordinance which imposed a curfew on jet air traffic at a local airport. The Court focused on Section 611 of the Federal Aviation Act, 49 U.S.C. § 1431, which, as the Court put it, represents a "comprehensive scheme of federal control of the...