City of Dallas v. Delta Air Lines, Incorporated, e

Case: 16-10051 Document: 00513860793 Page: 1 Date Filed: 02/02/2017
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 16-10051 FILED
February 2, 2017
CITY OF DALLAS, Lyle W. Cayce
Clerk
Plaintiff - Appellee
v.
DELTA AIR LINES, INCORPORATED,
Defendant - Appellee
v.
SOUTHWEST AIRLINES COMPANY,
Defendant - Appellant
Appeal from the United States District Court
for the Northern District of Texas
Before REAVLEY, DAVIS, and JONES, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:
This case concerns the operation of Love Field, an airport owned by
Plaintiff-Appellee the City of Dallas (the “City”), and leased in part to
Defendant-Appellant Southwest Airlines Company (“Southwest”). The City
filed a declaratory judgment action seeking a determination of whether it must
order Southwest to accommodate Defendant-Appellee Delta Air Lines,
Incorporated (“Delta”), at Love Field under the Lease Agreement or otherwise.
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Delta, Southwest, and the City filed competing motions for preliminary
injunctions. Delta argued that (a) the Lease Agreement requires the City to
order Southwest to accommodate Delta, and (b) Delta may sue to enforce the
obligations because it is a third party beneficiary under the Lease Agreement.
The court granted Delta’s motion in full. It found that the City was also entitled
to a preliminary injunction, in the alternative, for the same relief requested by
Delta because the district court interpreted the Lease Agreement to require
the City to accommodate Delta. Because it interpreted the Lease Agreement to
require accommodation, the court necessarily denied Southwest’s motion.
Southwest appealed, arguing that Delta is not a third party beneficiary
and that the Lease Agreement does not require the accommodation Delta
seeks. The City did not appeal, but in its appellee brief it argued that although
Delta should be accommodated under the Lease Agreement, Delta is not
entitled to sue as a third party creditor beneficiary. For the reasons set forth
below, we affirm the district court’s order granting the City’s preliminary
injunction, 1 granting Delta an accommodation until a final determination on
the merits, and affirm the district court’s denial of Southwest’s preliminary
injunction. Because Delta will effectively receive the relief it seeks under the
City’s preliminary injunction, we decline to address at this stage whether Delta
is a third party creditor beneficiary.
1 The district court twice stated in its opinion that it was granting the City’s motion
for a preliminary injunction but instead terminated the motion as moot, because it was
already granting the same relief under Delta’s preliminary injunction. See 2016 WL 98604
at *1 (“Because the equitable factors also weigh in favor of the City, the Court GRANTS the
City’s motion.” (emphasis in original)) and *15 (“So, even if the Court did not to grant Delta’s
motion, the Court grants the City’s motion for injunctive relief.” (emphasis in original));
compare id. at *16 (“The Clerk of the Court is hereby directed to terminate the City’s
motion for preliminary injunction as moot.” (emphasis in original)). The court’s intent to
grant the City’s motion and enter a preliminary injunction directing it to accommodate Delta
is clear, but affirming that portion of the court’s order requires this court to vacate the district
court’s order terminating as moot the City’s motion for a preliminary injunction and to render
judgment in favor of the City.
2
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I. Legal Context and Procedural History
Love Field is an airport owned by Plaintiff-Appellee the City of Dallas
and is most closely associated with Southwest, which is by far its biggest user. 2
Love Field has always been subject to special legislation (beginning with the
1979 Wright Amendment) which historically permitted it to operate only in a
very limited geographic region, in essence to protect the business of the Dallas-
Ft. Worth International Airport (“DFW Airport”), which does not have those
geographic restrictions.
In 2006, Congress suggested that the Cities of Dallas and Fort Worth
reach a long-term compromise removing the Love Field flight restrictions. The
City of Dallas, the City of Fort Worth, the DFW Airport Board, and the two
airlines then operating at Love Field, Southwest and Defendant American
Airlines, entered into the so-called Five Party Agreement on July 11, 2006. The
district court summarized the agreement as follows:
Important terms of the Five Party Agreement include the
following:
1. A reduction in the total number of gates at Love
Field from 32 to 20.
2. A prohibition of the subdivision of a gate in any
form, including the use of hardstands which permit an
airline to “ground load/unload” their passengers.
3. The allocation of 16 “preferential use” gates to
Southwest, two “preferential use” gates to American,
and two “preferential use” gates to ExpressJet
Airlines, Inc..
4. A limitation on flight operations to the hours of 6:00
a.m. to 11:00 p.m.
2 See generally City of Dallas v. Delta Airlines, Inc., No. 3:15-CV-2069-K, 2016 WL
98604, at *1-6 (N.D. Tex. Jan. 8, 2016). The facts in this section are taken from the district
court’s opinion unless otherwise noted.
3
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5. A prohibition of international flights originating
from Love Field.
In addition to these terms, the Five Party Agreement refers to the
possibility of a new entrant airline seeking space to operate at Love
Field under the new gate limitations:
To the extent a new entrant carrier seeks to enter Love
Field, the City of Dallas will seek voluntary
accommodation from its existing carriers to
accommodate the new entrant service. If the existing
carriers are not able or are not willing to accommodate
the new entrant service, then the City of Dallas agrees
to require the sharing of preferential lease gates,
pursuant to Dallas’ existing lease agreements. 3
Relevant to this dispute, Love Field allows a maximum of 10 flights per day
per gate, for a maximum of 200 flights per day.
The district court found that the Five Party Agreement does not define
the term “preferential use,” but the individual Lease Agreements between the
City and each airline (referred to in each Lease Agreement as a “Signatory
Airline”) defines “preferential use” to mean that the Signatory Airline is the
“primary, but not the sole, user.” 4
After the Five Party Agreement was formalized, the parties
presented their agreement to Congress as the collaborative local
effort for reforming and/or repealing the Wright Amendment.
Several, though not all, provisions of the Five Party Agreement
were ultimately incorporated into the Wright Amendment Reform
Act (“WARA”), which officially repealed the Wright Amendment
when it was adopted on October 13, 2006; but maintained the long-
distance flight restrictions from Love Field for eight more years
until October 2014. Just as in the Five Party Agreement, WARA
addressed new entrant airlines needing space to operate at the
now gate restricted Love Field, specifically providing that, “[t]o
3 Id. at *2.
4 Id.; see also Amended and Restated Lease of Terminal Building Premises (Airport
Use and Lease Agreement) by and between City of Dallas and Southwest Airlines Co.
(hereinafter simply “Lease Agreement”) at Section 1.46 (defining “Preferential Use Space”).
4
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accommodate new entrant air carriers, the city of Dallas shall
honor the scarce resource provision of the existing Love Field
leases.” (Emphasis added.) The substantive provisions regulating
flights in and out of Love Field were incorporated into WARA. The
provisions of the Five Party Agreement which were not
incorporated into and adopted by WARA are simply contractual
obligations between the five parties that are independent of
WARA, and do not include Delta. 5
In addition, Article I.12 of the Five Party Agreement requires the parties
to amend the underlying Lease Agreements and “take such actions, as
necessary or appropriate, to implement” the Five Party Agreement. Article
II.11 (titled “NO THIRD PARTY BENEFICIARIES”) states that the Five Party
Agreement is intended only for the benefit of the parties thereto and is not
intended to create any third party beneficiary relationship with anyone.
Thus, the Five Party Agreement facially requires the City and Southwest
to accommodate a “new entrant air carrier,” but it expressly disavows the
creation of any third party beneficiary status and leaves the implementation
of those obligations to the amendment of the Lease Agreement between
Southwest and the City. That Lease Agreement, as amended, sits at the core
of this dispute. The district court summarized the relevant terms as follows:
The terms of each Lease Agreement for gates between the City and
the respective Signatory Airline are essentially identical,
according to the City. The Signatory Airline has either exclusive
use or preferential use of its leased space at Love Field, as
described in the Lease Agreements. “Exclusive use” pertains to
that leased space that the Signatory Airline has the sole right to
use. “Preferential use”, on the other hand, applies to those leased
spaces where the Signatory Airline is considered the primary, but
not sole, user. Under each Lease Agreement, no Signatory Airline
has exclusive use of any gate, only preferential use. There is
exclusive use leased space at Love Field; but, there are no exclusive
use gates at Love Field.
5 2016 WL 98604, at *2.
5
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Just as both the Five Party Agreement and WARA recognized the
limitations created by the gate restrictions, each Lease Agreement
addresses the possibility of Love Field facilities becoming a “scarce
resource”. The Lease Agreement anticipates a new entrant air
carrier (“Requesting Airline”) may seek to provide service at Love
Field with the new gate restrictions. Recognizing the need for
“open access and uniform treatment”, the Lease Agreement goes
further and provides a procedure in Section 4.06F when
accommodation is sought by a Requesting Airline. This procedure
requires the Requesting Airline first exhaust all reasonable efforts
to secure a voluntary arrangement for accommodations from each
Signatory Airline. If the Requesting Airline’s attempt for
voluntary accommodation fails, then the City’s Director of Aviation
(“Director”) will notify each Signatory Airline that if a voluntary
accommodation is not made within the 30-day time frame under
each Lease Agreement, the Director will select one of the Signatory
Airlines to fulfill the accommodation request. Notice will then be
sent to the selected Signatory Airline which will have 10 days to
comment on or dispute the Director’s choice. The Signatory Airline
must accommodate the Requesting Airline unless the Director
rescinds his selection. The accommodation procedure does not
specify options or remedies the Requesting Airline might have if
the Director rescinds his selection. 6
Finally, Section 14.33 of the Lease Agreement contains an “entire agreement”
clause, providing that the Lease Agreement itself “constitutes the entire
agreement” which may not be changed without a written instrument.
As the district court noted, some post-WARA developments at Love Field
resulted in Southwest having a lease for preferential use of 16 gates,
Defendant United Airlines, Inc. having a lease (as successor to ExpressJet
Airlines, Inc.) for preferential use of two gates, and Defendant Virgin America,
Inc. having a preferential use of two gates as a result of the merger of American
with U.S. Airways. The Department of Justice previously held that Virgin’s
gates cannot go to either Southwest or Delta.
6 2016 WL 98604, at *3 (emphasis in original).
6
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We now turn to the actual dispute: Delta was not a Signatory Airline
because it did not have a Lease Agreement with the City. 7 It entered into a
month-to-month sublease with American beginning in July 2009, but that
lease was set to end on October 12, 2014. As contemplated by the Lease
Agreement, Delta, as a Requesting Airline, sought to remain at Love Field
through a voluntary accommodation, which it requested from the Signatory
Airlines on June 13, 2014.
Delta was unable to obtain a voluntary accommodation, so it requested
a mandatory accommodation from the City in a letter dated July 16, 2014. The
City selected United to accommodate Delta because United was only using
seven flights daily out of its two leased gates, which left 13 flights per day still
available under Love Field’s 10 flights per gate policy. In the meantime,
Southwest first acquired use of United’s gates through a gate usage agreement
with United and later bought the gates for $120 million in late 2014, leaving
Southwest with 18 gates and Virgin with two. Based on Southwest’s purchase
of United’s gates, the City rescinded its accommodation decision and notified
Delta on September 29, 2014 that it could no longer be accommodated.
The Lease Agreement provides no remedy for a Requesting Airline in the
event the City rescinds its accommodation selection, but Delta again requested
accommodation. The City initiated a second accommodation request on
December 1, 2014, and sent a letter to Virgin, United, and Southwest, stating
that Delta’s request had triggered the accommodation process set out in
Section 4.06F of the Lease Agreement and that the City would choose an airline
to accommodate Delta if they could not choose among themselves. The airlines
failed to voluntarily accommodate Delta, and the City never made a mandatory
accommodation decision.
7 For more information on the accommodation requests, see generally id. at *3-5.
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The City twice asked the Department of Transportation (“DOT”) for
advice on how to handle the situation. The DOT opined that the City had a
legal obligation to accommodate Delta, but the DOT’s opinions do not appear
to constitute a final agency action. The City never made a decision on its own,
and none of the airlines agreed to voluntarily accommodate Delta. 8
Delta continued to operate five flights per day out of Love Field under its
temporary gate usage agreement with United which was set to expire after 180
days, on July 6, 2015. When Southwest acquired United’s gates, it offered to
honor United’s temporary agreement with Delta for five daily flights until July
6. Southwest refused to extend that date.
Continuing to press the accommodation request with the City,
Delta told the City it would refuse to cease operations at Love Field
on July 7, 2015, because it had a right to accommodation. In an
attempt to avoid what it says would be potential chaos at Love
Field beginning July 7, 2015, the City filed this lawsuit on June
17, 2015, seeking declaratory relief related to, among other things,
its legal obligations and rights with respect to the Five Party
Agreement, WARA, the Lease Agreements and federal regulations
and laws affecting Love Field; essentially the City is asking this
Court to “Please tell us what to do.” 9
The district court convinced the parties to enter into a temporary
agreement preserving the status quo at Love Field until it could address the
dispute. Under this temporary agreement, Southwest continued allowing
Delta to operate five daily flights out of Love Field. 10
The parties then filed competing motions for preliminary injunctions.
Delta sought injunctive relief against Southwest to preserve the status quo
(i.e., five daily flights) pending final resolution of the declaratory judgment
action. Southwest sought injunctive relief against Delta prohibiting Delta from
8 Id. at *6.
9 Id.
10 2016 WL 98604, at *6.
8
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trespassing on Southwest’s gates at Love Field once the temporary gate usage
agreement terminated, on the ground that Southwest is not required to
accommodate Delta under the Lease Agreement. The City requested, in the
alternative, that the district court grant the relief requested by either Delta,
the relief requested by Southwest, or any other appropriate relief.
The district court correctly set out the framework for determining
whether to grant a preliminary injunction as follows:
The purpose of a preliminary injunction is to preserve the status
quo and thus prevent irreparable harm until the respective rights
of the parties can be ascertained during a trial on the merits. To
be entitled to a preliminary injunction, the movant must satisfy
each of the following equitable factors: (1) a substantial likelihood
of success on the merits; (2) a substantial threat of irreparable
injury; (3) the threatened injury to the movant outweighs the
threatened harm to the party sought to be enjoined; and (4)
granting the injunctive relief will not disserve the public interest.
Because a preliminary injunction is an extraordinary remedy, it
should not be granted unless the movant has clearly carried the
burden of persuasion’ on all four requirements. Failure to
sufficiently establish any one of the four factors requires this Court
to deny the movant’s request for a preliminary injunction. Any
factual findings and/or conclusions of law the Court makes herein
are not binding at a trial on the merits. 11
The district court granted a preliminary injunction in favor of Delta and
against Southwest because it found that, in addition to demonstrating the
other three requirements for a preliminary injunction, Delta had also shown a
substantial likelihood of success on the merits regarding (a) its ability to sue
as a third party creditor beneficiary under the Lease Agreement and (b) its
claim that the Lease Agreement required Delta to be accommodated. The
district court also found that the City, as a party to the Lease Agreement, was
independently entitled to its alternative request for injunctive relief requiring
11 Id. at *6 (N.D. Tex. Jan. 8, 2016) (citations and internal quotation marks omitted).
9
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Delta to be accommodated under the court’s interpretation of the contract.
Based on its interpretation of the Lease Agreement, the court necessarily
concluded that Southwest failed to show a substantial likelihood of success on
the merits.
Accordingly, the district court denied Southwest’s motion and entered a
preliminary injunction in favor of Delta essentially permitting Delta to
continue operating five flights daily until a final decision on the merits.
Southwest timely appealed.
II. Jurisdiction and Standard of Review
The district court had subject matter jurisdiction under 28 U.S.C. § 1331,
1332, and 1367. We have jurisdiction over this timely appeal of the district
court’s denial of a preliminary injunction pursuant to 28 U.S.C. § 1292(a)(1).
We review the district court’s ultimate decision to grant or deny a
preliminary injunction for abuse of discretion, but we review “a decision
grounded in erroneous legal principles” de novo. 12
III. Analysis
On appeal, Southwest argues that it is entitled to a preliminary
injunction because the Lease Agreement does not require accommodation. It
also argues that, at any rate, Delta may not sue because it is not a third party
beneficiary under the Lease Agreement. Delta defends the district court’s
opinion in full. The City argues that the district court’s interpretation of the
Lease Agreement requiring accommodation is correct, but Delta is not a third
party beneficiary under the Lease Agreement and should not be able to sue as
a non-party.
Speaks v. Kruse, 445 F.3d 396, 399 (5th Cir. 2006) (quoting Women’s Med. Ctr. of
12
Nw. Houston v. Bell, 248 F.3d 411, 419 (5th Cir. 2001)); Janvey v. Alguire, 647 F.3d 585, 595
(5th Cir. 2011) (citing Byrum v. Landreth, 566 F.3d 442, 445 (5th Cir. 2009)).
10
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The parties argue a great deal over the question of whether Delta, a non-
party to the Lease Agreement, is a third party creditor beneficiary entitled to
sue on its own right, but we conclude that we need not resolve this question at
the preliminary injunction stage. That is because the parties to the Lease
Agreement, Delta and the City (at least in the alternative), have sought
preliminary injunctions based on competing interpretations of the contract.
The interpretations are mutually exclusive, as is the relief available. Either
the Lease Agreement requires accommodation or it does not. Either Delta must
be accommodated in the meantime at the status quo of five daily flights out of
Love Field or it must not be.
If the interpretation requiring accommodation prevails, Delta will
continue to enjoy a temporary accommodation under the City’s preliminary
injunction, regardless of whether Delta is a third party beneficiary entitled to
sue in its own right. On the other hand, if Southwest’s interpretation is correct
and the Lease Agreement does not require accommodation, then Delta’s status
as third party beneficiary could not help it. Accordingly, we decline to reach
the third party beneficiary status question and instead address only the
question of whether the Lease Agreement requires accommodation.
Southwest does not challenge the district court’s findings on three of the
four preliminary injunction requirements as to either Delta or the City.
Southwest challenges only the first requirement, whether Delta and the City
demonstrated a substantial likelihood of success on the merits. The district
court summarized the standard as follows:
In establishing a “substantial likelihood of success”, the movant “is
not required to prove [his] entitlement to summary judgment” for
purposes of preliminary injunction. Byrum v. Landreth, 566 F.3d
442, 446 (5th Cir. 2009); see also Janvey v. Alguire, 647 F.3d 585,
595-96 (5th Cir. 2011). The district court “look[s] to ‘standards
provided by the substantive law’” to determine likelihood of
11
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success on the merits. Janvey, 647 F.3d at 596 (quoting Roho, Inc.
v. Marquis, 902 F.2d 356, 358 (5th Cir. 1990)). 13
Delta asserted four different claims, but the district court only addressed
its claims against Southwest for breach of contract and declaratory judgment
based on the Lease Agreement. 14 Under Texas law, a party asserting breach of
contract
must prove: (1) the existence of a valid contract; (2) that the [party]
performed or tendered performance; (3) that the other party
breached the contract; and (4) that the party was damaged as a
result of the breach. Cordero v. Avon Products., Inc., No. 15-40563,
2015 WL 6530721, at *2 (5th Cir. Oct. 29, 2015). A party must
establish its privity to the contract or its status as a third-party
beneficiary in order to sue for breach of contract. Maddox v.
Vantage Energy, LLC, 361 S.W.3d 752, 756-57 (Tex.App.—Ft.
Worth 2012). 15
The City’s own motion for a preliminary injunction is a bit broader than
a breach of contract claim, in that the City seeks not just a narrow
determination of whether Southwest breached the Lease Agreement but a
general determination of its own rights and obligations under the Lease
Agreement, the Five Party Agreement, the WARA, and other applicable
rules. 16 In essence, the City simply wants to know what it is required to do.
Though there are theoretical differences between Delta’s arguments and the
City’s, there are no practical differences at this stage. The interpretation of the
Lease Agreement resolves the preliminary injunction inquiry.
On the merits of Delta’s claim that Southwest breached the Lease
Agreement by failing to accommodate it as required under Section 4.06F, the
court noted that Texas law requires Delta to prove: “(1) the existence of a valid
13 2016 WL 98604, at *7.
14 Id.
15 Id.
16 Id. at *14.
12
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contract; (2) that Delta performed or tendered performance; (3) that Southwest
breached the contract; and (4) that Delta was damaged as a result of the
breach.” 17 The court noted that the contract was valid, and it held that the
second factor was met because
the record establishes that Delta performed its obligation under
the accommodation procedure in section 4.06F by contacting all
Signatory Airlines and any airline subleasing gate space from a
Signatory Airline beginning June 13, 2014, to try to secure
voluntary accommodation. 18
The court also held that Delta suffered harm from the alleged breach
because it would no longer be able to operate at Love Field at all if Southwest
refused to honor its accommodation obligations under the Lease Agreement. 19
The biggest question, of course, is whether Southwest breached the Lease
Agreement at all.
The court focused on the fact that Section 4.06F provides that the
Signatory Airline (here Southwest) “agrees to accommodate such Requesting
Airline at its Lease Premises at such times that will not unduly interfere with
its operating schedule” but does not define the phrase “unduly interfere
with.” 20 The court started with the legislative history:
The Court finds it very interesting that former Mayor Laura Miller
testified about this exact phrase in the Lease Agreement at the
Congressional subcommittee hearing on reforming the Wright
Amendment Act. In response to a subcommittee member’s
question about the meaning of the undefined and “vague” term
“unduly interfere with”, Ms. Miller testified:
Well it was crafted by the Dallas City Attorney’s Office
and we understand, since it has never been tested, we
have never had a conflict; that we should, if we are
17 Id. at *9 (citation omitted).
18 Id.
19 Id. at *12.
20 Id. at *10.
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responsible, create a very clear policy using this as the
template for how we are in real terms going to be
executing this. This [term] gives us the authority to tell
[a Signatory Airline], you have to make room. But I
think that like other airports like you cited that have
this issue of capacity, we need to have a very clear
policy in place so that the tenants have a clear
expectation for how it’s going to work when the director
say we shall make room for [a Requesting Airline] and
this is how we are going to do it.
Ex. 631, p. 0052. As we now know, the City wholly failed to craft
any policy, let alone a clear one, setting forth how the
accommodation procedure and process would work in reality. This
“vague language about ‘unduly interfere with’” was drafted by the
City itself and was noted by at least one concerned subcommittee
member of contributing to “Southwest [being] in the catbird seat”.
And worse, then Mayor Laura Miller acknowledged the need for
the City, “if we are responsible, [to] create a very clear policy...for
how we are in real terms going to be executing this.” Now in this
case, the Court is asked to follow through with what the City
should have done years ago. 21
The district court viewed the problem before it as one of supplying a
reasonable interpretation of vague or undefined contractual language, which
in turn required examining the particular facts of Southwest’s usage and
Southwest’s own past interpretation of that language. The court held that the
question of whether an accommodation would “unduly interfere with” a
Signatory Airline’s operations must be examined at the time the
accommodation request is made:
The Court concludes, for purposes of this preliminary injunction,
that “unduly interfere with” in section 4.06F means the requested
flight accommodation can fit within the Signatory Airline’s
existing published schedule, at the time the accommodation
request is made, without causing the Signatory Airline’s existing
schedule to reach maximum usage. The evidence establishes that
21 2016 WL 98604 at *10 (emphasis in original).
14
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Southwest considers maximum usage or “full utilization” of gates
at Love Field to be 10 flights daily per gate. The Court finds Delta
provided evidence that, at several points in time after its initial
accommodation request in June 2014, Southwest was able to
accommodate Delta’s five daily flights on Southwest’s 16 gates
without unduly interfering with Southwest’s existing operating
schedule. 22
The district court set out, in detail, how Southwest had plenty of room in
its schedule to accommodate Delta’s five flights daily when Delta made its first
request in June 2014. 23 As the district court noted, Southwest did not even
announce its intention to operate at full capacity (10 flights per gate per day)
until February 26, 2015, and it did not reach full capacity until August 9,
2015. 24 Thus, the court concluded that Southwest could have voluntarily
accommodated Delta’s five daily flights without “unduly interfering with”
Southwest’s schedule at any point prior to August 9, 2015. 25 Beyond the
obvious capacity to voluntarily accommodate, the district court pointed out
that Southwest’s Lease Agreement was for preferential, not exclusive, use, and
Southwest could not obtain exclusive use simply by maximizing its own
utilization following an accommodation request:
Under the Lease Agreement, preferential use of airport facilities
means the Signatory Airline is the primary, but not sole, user.
Exclusive use means the airline has the sole right to use the space.
There are no exclusive use gates at Love Field. Southwest has
preferential use of the gates it leases from the City and subleases
from United. Therefore, Southwest is considered to be the primary,
but not sole, user of the gates. Southwest does not have an
unfettered right to the gates it has leased; and, despite Southwest’s
argument to the contrary, the preferential use rights are subject to
the accommodation provision contained in the Lease Agreement,
which Southwest agreed to and signed. Southwest’s position is that
22 Id.
23 Id.
24 Id.
25 Id. at *11.
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accommodation is not required as long as they are using the gates
at full utilization of 10 flights daily out of each gate. Southwest did
not “fully utilize” its gate space until, at the earliest, its
announcement on February 26, 2015 of increased flight operations,
or, at the latest, until August 2015 when the actual increase was
fully realized. Southwest cannot “ramp up” its flight schedule to
thwart the pending accommodation request by Delta. 26
The district court noted that when the WARA was being debated before
Congress, Southwest’s CEO at the time, Herb Kelleher, had testified that
“‘[A]ny carrier that is desirous now of serving Love Field can easily be
accommodated even after those [12] gates come down,’ limiting Love Field to
20 gates.” 27 Mr. Kelleher testified that the City would simply tell Southwest,
“you have got these vacant spaces in your gate utilization and by golly you are
going to put another carrier in there.” 28 The district court summarized:
Southwest agreed in Section 4.06F that it would accommodate a
“new entrant airline” when accommodation would not “unduly
interfere” with its own operating schedule. As the Court has found,
Southwest’s schedule would clearly accommodate Delta when it
made its initial request for voluntary accommodation in
accordance with Section 4.06F, and for several months after. Delta
has established Southwest did not comply with its contractual
obligation and, therefore, breached Section 4.06F, the
accommodation provision, of the Lease Agreement. 29
In sum, the court found that the Lease Agreement required Southwest
to accommodate a new entrant airline such as Delta, and that Southwest had
the capacity to accommodate Delta easily at the time Delta requested the
accommodation, which is when the City should have granted the mandatory
accommodation. Thus, the court concluded that Southwest could not escape its
26 Id.
27 2016 WL 98604 at *11 (quoting congressional testimony)
28 Id.
29 Id.
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accommodation obligation merely by increasing its schedule to full utilization
after the fact to shut Delta out. Rather, it was required to accommodate Delta’s
five flights daily and maintain that accommodation indefinitely under the
court’s interpretation of the “unduly interfere with” language of Section 4.06F.
We agree with the district court that Delta and the City have shown a
substantial likelihood of success on the merits on the claim that the Lease
Agreement requires Delta to be accommodated. The Lease Agreement plainly
establishes a duty to accommodate by both Southwest and the City, and the
scope of that duty is determined largely through the interpretation of language
which the Lease Agreement itself leaves undefined. The district court,
interpreting that language for the first time, found that Southwest owed the
duty to accommodate Delta under these circumstances, effective when Delta
should have received a mandatory accommodation. We find the district court’s
reasoning to be persuasive under these facts.
We are not persuaded by Southwest’s arguments, which largely depend
on a contrary interpretation of the Lease Agreement’s undefined language. For
instance, Southwest argues that Delta’s usage would “unduly interfere with”
Southwest’s operating schedule, especially after Southwest reached full
utilization, but the district court explicitly considered and rejected those
arguments under its own interpretation of the contractual language, with
which we agree at this stage.
Southwest raises no persuasive arguments against the district court’s
interpretation. The crux of Southwest’s position is that its preferential use
lease essentially entitles it to exclusive use of the gate once it reaches full
utilization. One problem for Southwest is that the language of the Lease
Agreement itself suggests that even an exclusive use lease might be subject to
accommodation, in that the “scarce resource” clause in Section 4.06F refers to
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“exclusive or preferential use” in connection with the accommodation
obligation.
Next, Southwest argues that Section 4.06F is not even triggered unless
and until the City ordered Southwest to accommodate Delta, which never
happened because the City failed to act. The problem is that the City filed this
suit seeking a determination of its own obligations under the Lease Agreement,
among other things, and the district court found that the City was required to
accommodate Delta. The City sought appropriate injunctive relief, including
an accommodation of Delta if that is required under the Lease Agreement.
Under the district court’s interpretation of the Lease Agreement, which we
adopt at this stage, accommodation is required.
In short, Southwest has not challenged three of the preliminary
injunction factors, only whether the City (and Delta, by extension) has shown
a substantial likelihood of success on the merits on its claim that the Lease
Agreement requires Delta’s accommodation. The district court, examining the
Lease Agreement carefully, concluded that the contract’s plain language and
the court’s interpretation of undefined terms (especially the meaning of
“unduly interfere with”) combined to show that the City had shown a
substantial likelihood of success on the merits.
We find the district court’s interpretation reasonable, and we agree that
the City has shown a substantial likelihood of success on the merits.
Accordingly, we affirm the court’s grant of the City’s motion for a preliminary
injunction, preserving the status quo and allowing Delta to continue to operate
five daily flights out of Love Field. Because Delta will receive the relief it
requests under the City’s preliminary injunction, we decline to reach the issue
of Delta’s motion for a preliminary injunction, which would require a
determination of Delta’s third party beneficiary status.
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Because we affirm the district court’s grant of the City’s motion for a
preliminary injunction, we necessarily affirm the district court’s denial of
Southwest’s motion for a preliminary injunction.
IV. Conclusion
As noted above, in the district court’s memorandum opinion and order,
it twice stated that it was granting the City’s motion for a preliminary
injunction but technically terminated the City’s motion as moot, because it was
granting the same relief under Delta’s preliminary injunction. The effect of this
opinion is to grant the City’s motion and give interim relief to Delta. For the
reasons set out above, we VACATE the district court’s order terminating the
City’s motion as moot and, consistent with the district court’s opinion,
RENDER judgment granting the City’s motion for a preliminary injunction
and ordering the accommodation of Delta until a judgment on the merits is
reached. We also AFFIRM the district court’s denial of a preliminary injunction
in favor of Southwest. Because Delta will receive an accommodation under the
City’s preliminary injunction, we decline to address, as moot, the district
court’s grant of Delta’s motion for a preliminary injunction.
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JONES, Circuit Judge, dissenting:
With due respect to my colleagues in this complex case, I dissent. Delta
has not shown a substantial likelihood of success on the merits, which is critical
to receiving a preliminary injunction. The majority, in my view, make a critical
analytical error: they do not rule on the dispositive issue, whether Delta is a
third party beneficiary of the airport lease agreement (“Lease Agreement”)
between the City and Southwest Airlines. I disagree with the district court’s
interpretation, holding Delta to be a third party creditor beneficiary under
Texas law.
I hope and trust that on remand, the district court will review the issues
closely and assimilate all the relevant evidence before issuing its final
judgment.
1. Why Delta’s standing to sue is outcome-determinative to this
Declaratory Judgment-based preliminary injunction.
The district court misinterpreted Texas law and held that Delta is a
“creditor beneficiary” of the Lease Agreement. This conclusion preceded the
court’s interpretation of the Lease Agreement and allowed it to referee the
competing positions of Delta and Southwest. On appeal, however, the majority
decline to decide the threshold issue of Delta’s right to seek an interpretation
of the Lease Agreement. According to the majority, there is a “live controversy”
under the Declaratory Judgment Act between the City and Southwest no
matter what Delta’s rights may be. This forbearance is an error.
From the standpoint of the Declaratory Judgment Act, this contract
litigation is a three-legged stool. The dispute arose when Delta’s extended
month to month sublease expired, and Delta threatened civil disobedience
rather than cease its daily flights from Love Field. The City sued Southwest
and Delta seeking declaratory relief interpreting the Lease Agreement to bind
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both airlines. Southwest then sued Delta, and Delta sued Southwest. If Delta
is not a third party creditor beneficiary of the Lease Agreement, however, it
has no claim for breach against the City or Southwest and certainly cannot
claim “perpetual” rights under the Lease Agreement to Southwest’s
preferential lease gates. Consequently, without an enforceable contract claim
by Delta, there is no “live controversy” between the City and Southwest.
Delta’s leg of the stool is gone. 1
The remaining legs comprise the City and Southwest. But no
adversarial dispute connects these legs. The City has repeatedly and
consistently denied any legal claim against Southwest. The City simply wants
judicial “clarification” of its Lease Agreement. If the district court had rejected
Delta’s claim to third party creditor beneficiary status under the Lease
Agreement, the court could not render an interpretation for the two non-
opposing parties, the City and Southwest. The Declaratory Judgment Act only
permits resolution of live controversies. A live controversy might arise if in the
future course of performing the Lease Agreement, the City’s and Southwest’s
interests were bound to collide. Venator Grp. Specialty, Inc. v.
Matthew/Muniot Family, LLC., 322 F.3d 835, 838 (5th Cir. 2003). Because
Delta is not a third party creditor beneficiary, this is not such a case. Under
the Lease Agreement Section 4.06(F), there is no adversity between the City
and Southwest until and unless (a) a “new entrant” seeks “accommodation;”
(b) all present leaseholders at Love Field deny such accommodation; (c) the
City tentatively selects one of the leaseholders to reach an accommodation;
(d) the City fails to rescind such designation; and (e) the selected leaseholder
1 Whether Delta has other viable legal claims was not decided by the district court or
this court. Those claims remain pending. Whether the resolution of any of those claims
would necessarily put the City at odds with Southwest is beyond the scope of this appeal.
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then refuses to go through with the City’s order to accommodate. Steps (d) and
(e) have not occurred here.
The City’s brief emphasizes its non-adversarial stance toward
Southwest. The City offers no interpretation of the Lease Agreement in conflict
with Southwest’s espoused positions. On the contrary, the City agrees with
Southwest that Delta is not a third party beneficiary. The City also agrees
with Southwest that even if Delta is legally entitled to an accommodation,
Delta may not secure a “perpetual” accommodation. This patent failure of
adversary testing of the Lease Agreement between the City and Southwest
exposes that, unless Delta was entitled to enforce the Lease Agreement, the
district court rendered an advisory opinion.
The district court’s opinion plausibly rests on the three-legged stool only
because it first found that Delta was a third party beneficiary. As will be seen,
I disagree with that conclusion and consequently disagree with the majority’s
avoidance of the issue of Delta’s standing.
2. Delta is not a Third Party Beneficiary
Texas law presumes that parties enter a contract for themselves alone.
Consequently, it is also presumed that strangers to the contract have no rights
under it and cannot sue to enforce it. Delta claims to be a third party creditor
beneficiary of the Lease Agreement and thus outside the presumptions, and
the district court agreed. The district court was in error.
To evaluate Delta’s claim, I consider the parties’ contractual
arrangements, the court’s reasoning, and how Texas law should have been
applied.
a. The Contracts
The Lease Agreement does not expressly mention Delta, although it
provides for applications by “new entrant” airlines to commence service from
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Love Field if a variety of conditions are fulfilled. For instance, the current
holders of preferential gate leases may approve and sublease gates voluntarily
to the new entrant. Alternatively, the City may, if it does not “unduly
interfere” with the current holders’ scheduled service, impose requirements
upon the current holders to accommodate the new entrant. 2 If the new entrant
is ultimately denied subleasing, however, the Lease Agreement affords no
further redress.
The Lease Agreement does not stand alone. It was executed pursuant to
the other arrangements that made possible the reform of the Wright
Amendment, which prevented Southwest from flying out of Love Field to states
non-contiguous to Texas. The Five Party Agreement among Southwest,
American, the cities of Dallas and Fort Worth, and DFW Airport undergirded
passage of the Wright Amendment Reform Act (“WARA”). Five Party
Agreement, Art. I, § 1. That Agreement expressly rejects creating third party
beneficiary status for any non-party. Art. II, § 11. Delta is not a party and
played no role in the Five Party Agreement. To achieve its goal of being freed
from the flight limitations embodied in the Wright Amendment, Southwest
agreed in the Five Party Agreement to reduce the Love Field gates
permanently from 32 to 20 and to keep only a proportionate percentage of the
remaining gates (16 at first). Southwest also essentially agreed not to fly from
DFW, as any leasing of gates there would require a one-for-one reduction of its
preferential lease gates at Love Field. While the Five Party Agreement
contemplated the possibility of accommodation to “new entrant” carriers at
2 Denominating Delta a “new entrant” for any purpose stretches language and reality,
but no large point about this conundrum seems to have been made in the district court. Delta
not only is the second largest airline in the world, but it also holds gates at DFW Airport.
And the DOJ, in evaluating the market for passenger airline services in the DFW metroplex
area, has included DFW and Love Field as one functional market.
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Love Field, it placed the onus on the City of Dallas either to facilitate voluntary
arrangements with Love’s existing carriers or “to require the sharing of
preferential lease gates, pursuant to Dallas’ existing lease agreements.” Five
Party Agreement, Art. I, § 3.b.
Finally, the WARA statutorily acknowledges the inviolability of existing
preferential gate leases under the Lease Agreement, in stating that the law
shall not be construed to require the City of Dallas . . . to modify or
eliminate preferential gate leases with air carriers in order to
allocate gate capacity to new entrants or to create common use
gates, unless such modification or elimination is implemented on
a nationwide basis.
Wright Amendment Reform Act of 2006, PL 109–352, Oct. 13, 2006, 120 Stat
2011, § 5(e)(2)(B). This language clearly protects preferential gate holders and
restricts accommodation of new entrants in the absence of nationwide
reallocations.
The Five Party Agreement and the Lease Agreement are
interdependent, and their status is enshrined in the WARA. Under each
agreement and the statute, the rights of the contracting parties are protected,
and the proscription of third party beneficiary status (or severe restriction on
new entrant admissions) should be respected.
b. The District Court’s Reasoning
The district court equated Delta with a “new entrant” under the Lease
Agreement and held that the Lease Agreement obligates Southwest to
“accommodate” Delta in that capacity. City of Dallas v. Delta Air Lines et al.,
No. 3:15-cv-02069-K, 2015 WL 3901862 at *22–23 (N.D. Tex., Dallas June 17,
2015) (“The Lease Agreement language does not limit the parties’
accommodation obligation to an airline not currently operating at Love
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Field . . . The Court agrees with Delta’s proposed definition of ‘new entrant’.
Although the Lease Agreement language is not artfully drafted, the Court finds
‘new entrant airline’ to mean any airline that is not a Signatory Airline in a
Lease Agreement with the City and an airline needing space at Love Field to
provide service.”). Southwest agreed, in Section 4.06(F) of the Lease
Agreement, to accommodate a “requesting airline” at times that would not
“unduly interfere” with Southwest’s schedule. According to the court, this
“duty owed to Delta is a contractual obligation or some other legally
enforceable commitment . . .” and it is “clear and unequivocal that the City and
the Signatory Airlines intended to directly benefit a ‘new entrant
airline’ . . . with this accommodation provision.” The court further concluded
that Delta is a third party “creditor beneficiary” entitled to sue to enforce the
agreement—not a mere “incidental beneficiary” under Texas law. As the court
put it:
If the City and Southwest as parties to the Lease Agreement did
not intend for a ‘new entrant airline’ to have the right to enforce
this section, there would be no other way for the accommodation
procedure to work and no remedy for the ‘new entrant airline’
should the City and/or Southwest not comply with their
agreement.
City of Dallas v. Delta Air Lines et al., No. 3:15-cv-02069-K, 2015 WL 3901862
at *24 (N.D. Tex., Dallas June 17, 2015). Given the “obligations” of the Lease
Agreement toward a “new entrant,” the court concluded, such new entrant
must be able to sue. Id. at 23-24.
c. Texas Law
Contrary to the district court’s holding, Delta is not a third party
beneficiary under Texas law. “Under Texas law, parties are presumed to be
contracting for themselves only.” Fleetwood Enterprises, Inc. v. Gaskamp,
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280 F.3d 1069, 1075 (5th Cir.), opinion supplemented on denial of reh'g,
303 F.3d 570 (5th Cir. 2002). The Texas Supreme Court has clearly stated that
“[a] court will not create a third-party beneficiary contract by implication . . .
The intention to contract or confer a direct benefit to a third party must be
clearly and fully spelled out or enforcement by the third party must be denied.”
MCI Telecommunications Corp. v. Texas Utilities Elec. Co., 995 S.W.2d 647,
651 (Tex. 1999). A third party may only sue to enforce a contract that it did
not sign when “the parties to the contract entered the agreement with the clear
and express intention of directly benefitting the third party.” Tawes v. Barnes,
340 S.W.3d 419, 425 (Tex. 2011). Third parties can recover on a contract made
by other parties “only if the parties intended to secure a benefit to that third
party, and only if the contracting parties entered into the contract directly for
the third party's benefit.” Stine v. Stewart, 80 S.W.3d 586, 589 (Tex. 2002)
(emphases added). The court construes the entire agreement and gives effect
to all of its provisions so that no provisions are rendered meaningless. Id. at
590.
Once a third party beneficiary status is established, it must next be
determined what type of third party beneficiary relationship exists between
the parties. The district court classified Delta as a third party “creditor”
beneficiary with standing to enforce the Lease Agreement. Creditor
beneficiaries, as opposed to incidental beneficiaries, may bring suit to enforce
a contract. Allan v. Nersesova, 307 S.W.3d 564, 571 (Tex. App. 2010). A party
is considered a creditor beneficiary when “performance will come to satisfy a
duty or legally enforceable commitment owed by the promisee.” S. Texas Water
Auth. v. Lomas, 223 S.W.3d 304, 306 (Tex. 2007). “[T]he focus is on whether
the contracting parties intended, at least in part, to discharge an obligation
owed to the third party.” Stine, 80 S.W.3d at 591. But if the contract only
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confers an indirect or incidental benefit, a third party cannot sue to enforce the
contract. Tawes, 340 S.W.3d at 425.
d. Critique of the District Court
Section 4.06(F) states that existing preferential gate leaseholders “agree”
to accommodate a “new entrant” on “reasonable terms” where such
accommodation will “not unduly interfere” with the leaseholder’s operating
schedule “taking into consideration all the circumstances of such an
accommodation agreement.” This language, full of contingencies, hardly offers
certainty to the new entrant. Moreover, if the existing preferential leaseholder
fails to enter into a voluntary accommodation, the City steers any further
decision-making process. Characterizing a “new entrant” as an intended
creditor beneficiary of this provision misreads the Lease Agreement and
violates the cardinal principles reaffirmed in Texas law. Third party
beneficiary status is never to be implied. Here, the new entrant has no “rights”
so clearly and fully spelled out as to enable a court to “enforce” the alleged
obligation. That any “new entrant” may seek accommodation and potentially
benefit from a gate sublease is a far cry from saying the disappointed entrant
may force itself upon the contracting parties, much less obtain the “perpetual”
sublease that the court preliminarily awarded Delta.
The court got off on the wrong foot in holding that “the duty owed to
Delta is a contractual obligation or some other legally enforceable commitment
under the contract.” This conclusion proves too much. The court essentially
extracted one sentence from Section 4.06(F) and engaged in an overly narrow
parsing of the term “unduly interfere.” Every third party beneficiary claim
begins with the assertion that the contracting parties “intended” to confer
benefits or status on the non-party. The analysis then turns on the extent to
which the contract, read as a whole, has used the language of intentionality,
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described the beneficiary with sufficient precision, and specified the
beneficiary’s status in a way that a court can enforce. The necessary careful
analysis of the Lease Agreement was not undertaken here.
Read as a whole, Section 4.06(F) crafts an intricate mechanism for
providing accommodations under some limited circumstances to new entrant
applicants. A new entrant is required first to approach existing preferential
gate lease holders for voluntary arrangements. Section 4.06(F)(2).
Leaseholders are not required to succumb voluntarily, nor are their duties
toward new entrants precisely spelled out. Instead, the leaseholder agrees to
accommodate subject to “reasonable terms” that would not “unduly interfere”
with the existing holder’s operating schedule “taking into consideration all the
circumstances.” Section 4.06(F). To the extent this imposes an “agreement to
agree” on the leaseholder, it is unenforceable in Texas law. Liberto v. D.F.
Stauffer Biscuit Co., 441 F.3d 318, 323 (5th Cir. 2006) (“[W]here an agreement
leaves essential terms open for future negotiations, it is not a binding contract
but, rather, an unenforceable ‘agreement to agree.’”). As such, it is impossible
to see how a third party beneficiary can claim a “contractual obligation or other
legally enforceable duty” that directly contracting parties would not owe to
each other.
In any event, if the new entrant exhausts its approach to existing
leaseholders, the new entrant may approach the City, embarking on a
contractually specified procedure whose course must be largely determined by
the City. Section 4.06(F)(2). The City “may select” one of the current
leaseholders to accommodate the new entrant. Section 4.06(F)(3). Texas law
holds the word “may” is ordinarily permissive, not mandatory. See GT Leach
Builders v. Sapphire, 458 S.W.3d 502, 525 (Tex. 2015) (“[W]e find no basis on
which to conclude that the parties intended the word ‘may’ to be mandatory
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rather than permissive in this context.”). Even if the City does so, however,
the leaseholder may register its objection, Section 4.06(F)(3), and the City may
rescind an order for accommodation. Section 4.06(F)(4). Through this point in
the procedures, the new entrant never becomes legally entitled to receive
accommodation. Only if the City finally requires one of the leaseholders to
enter into an accommodation, might it be said that the new entrant’s rights
have matured into a legally enforceable obligation. 3 Critically, however, even
if the City requires an existing leaseholder to accommodate a new entrant,
Section 4.06(F)(4), “[i]n case of a conflict between schedules . . . the [existing
leaseholder] will have priority in use of its personnel and its Leased Premises.”
Section 4.06(F)(4)(a).
A complete reading of Section 4.06(F) demonstrates that the district
court inferred intended beneficiary status from one misdescribed sentence of
the Lease Agreement while overlooking the contract’s crucial implementation
process for accommodations. Texas law does not permit implication of creditor
beneficiary status in this way.
Other deficiencies in the court’s interpretation of Section 4.06(F)
undercut its third party beneficiary conclusion. First, the holding that
Southwest’s operating schedule was not “unduly interfered with” is suspect
legally and factually. From a legal standpoint, this phrase acts in tandem with
the remainder of the sentence allowing Southwest to insist on “reasonable
terms” and “taking into consideration all the terms of such an accommodation
agreement.” The court never mentions these important limitations on the
“duty” to accommodate. Factually, the court adopted an unrealistic snapshot
3 I do not speculate on that possibility, however, because the Section 4.06(F)
procedures never went so far here.
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in time by awarding Delta a permanent accommodation based on precisely the
point at which Southwest was adjusting its schedule to begin wholly new
airline service from Love Field throughout the United States. According to the
WARA, Southwest remained constrained until October 13, 2014 to fly only to
states adjacent to Texas (plus a couple others). WARA, § 2(b). Looking to the
alleviation of that limit, Southwest had to evaluate changing market
conditions nationwide, execute a publicity campaign, adjust its current and
future schedules, and sell tickets well in advance in order to roll out the new
service cost-effectively. That Southwest was undertaking plans to fully utilize
its preferential lease gates from Love Field in the near future was widely
known and anticipated. (After all, Southwest had fully utilized even more gates
at Love Field before the Five Party Agreement came into existence.) Delta, in
other words, exploited the single period when there might have been a gap in
Southwest’s immediate but hardly final operating schedule. By ignoring the
demands of Southwest’s business, which were created by the WARA timetable,
the court failed to “take into consideration all the terms” such an
accommodation would impose upon Southwest. The effect of the court’s
reasoning deprives Southwest, contrary to the Lease Agreement, the Wright
Amendment, and the Five Party Agreement, of the benefit of its preferential
lease status. 4
4 Allowing this “new entrant” to exploit a clearly temporary hiatus in the leaseholder’s
full use of its gates has two other adverse consequences. Any future “new entrant” can make
use of temporary gaps in service to insist on its own accommodation, a result that could allow
piecemeal nibbling away at the existing leaseholders’ rights. Second, this interpretation
detracts from the City’s flexibility in determining when accommodations must be required, a
flexibility clearly envisioned by the City’s being provided access to monthly gate usage
statistics from the leaseholders. Section 4.06(F). How the City chooses to use these statistics
is eroded with a holding that temporary gaps in service must be filled with accommodation
subleases.
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Finally, contrary to the district court’s reasoning, the accommodation
provision is not rendered “superfluous” in the absence of a contractual
“enforcement” mechanism. It is the parties’ contractual provisions, not the
court’s post hoc sense of fairness, that determines the scope of third party
beneficiary status under Texas law. An “accommodation” “agreement” as
vague as the provisions embodied in Section 4.06(F) is simply not judicially
enforceable. See KW Const. v. Stephens & Sons Concrete Contractors, Inc.,
165 S.W.3d 874, 883 (Tex. App. 2005) (“If the terms are so vague that the court
cannot determine what the parties intended or what terms to enforce, the
contract is unenforceable.”). The “enforcement” here is in the hands of the City,
hedged about with limits on existing leaseholders’ duty to accommodate and
the City’s flexibility. As has been noted, the City bears the laboring oar to
ensure that accommodations, if authorized by the Lease Agreement and “all
the circumstances,” are effectuated. The City, while in agreement with
Southwest that Delta is not a third party beneficiary, maintains independent
interests in maximum utilization of Love Field. Moreover, to the extent the
duty to accommodate may flow from federal law provisions, a matter not
briefed or argued before this court, Delta had the ability to commence
administrative proceedings before the relevant federal agency. Rather than
signal the need for judicial intervention, Section 4.06(F) was structured to
maintain flexibility in the complex business of assigning, allocating, and
negotiating airport gate leases.
For all these reasons, it cannot be maintained that Delta, even if a “new
entrant” under the Lease Agreement, acceded to “rights” (what rights?), much
less to a “perpetual” sublease from Southwest at Love Field. The court no
doubt acted with the best of intentions. This preliminary injunction, however,
did not interpret so much as impose a status on Delta to enforce invented
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contract rights, completely bypassing the procedures and limits of
Section 4.06(F).
I respectfully dissent.
32