November 2013

A recent analysis of the relationship of airline mergers to airline service and pricing reports the unsurprising result that, since the mergers of Southwest Airlines and AirTran, United Airlines and Continental Airlines, and Delta Airlines and Northwest Airlines, airline capacity measured by the number of available seats, has gone down across the board at the top 100 airports in the 48 contiguous states since 2005 while prices have increased equally broadly.  For example, at the largest airport in the United States, Atlanta-Hartsfield, the number of seats has fallen by 12.3%, while the average fare price has increased by 3.7%.  Similarly, at Boston Logan, the number of seats has dropped by 10%, while the fares have increased at an average of 2.2%.  Those changes, moreover, are not limited to the top 100 airports.  At secondary airports in metropolitan areas with multiple airports, the same trend persists.  At Oakland Airport in the San Francisco Bay area, fares have increased 6%.  And those ominous trends appear to continue.

In response to the proposal of a merger between American Airlines and U.S. Airways, the Justice Department promptly brought suit on the grounds of, among other things, restraint of trade and violation of the Sherman Antitrust Act.  Last week, the Justice Department settled with the airlines on the promise by the airlines to surrender gates and slots at major airports. 
 Continue Reading Airline Mergers Seriously Impacting Prices and Services

The internet has been abuzz lately with talk about the latest legal action filed by the City of Santa Monica (“City”) against the Federal Aviation Administration (“FAA”), on October 31, 2013, seeking to avoid FAA’s refusal to allow the closure of Santa Monica Airport, see City of Santa Monica v. United States of America, et al., U.S.D.C. Case No. CV13-08046, an active general aviation airport surrounded by residential neighborhoods.

More specifically, the suit seeks to: (1) quiet title to the real property upon which the airport is now located, pursuant to 28 U.S.C. § 2409a, as having been owned in fee simple by the City since approximately 1926; (2) obtain a judicial declaration that any attempt by FAA to prevent closure interferes with the City’s constitutional obligations to protect the public health, safety and welfare and, thus, constitutes a “taking” without just compensation in violation of the Fifth Amendment to the United States Constitution.  The City bases this claim on its ownership of the airport property in fee simple, and any constraint on closure is “constructive confiscation of airport property, and, thus, a violation of the prohibition on takings with just compensation in the Fifth Amendment to the United States Constitution;” (3) establish violation of the Tenth Amendment to the United States Constitution brought about by FAA’s stepping outside the rights given to the federal government under Constitution, and incurring on the powers of protection of the public health, safety and welfare left to the states; and (4) establish violation of the Due Process Clause in the Fifth Amendment to the United States Constitution arising from FAA’s contravention of its own regulatory guidance, which limits FAA’s power to restrict closure to those instances where FAA owned the property upon which the airport to be closed is located. 

Leaving aside: (1) the difficulty of maintaining a case for inverse condemnation, or “taking” by one public entity against another where the express language of the Fifth Amendment provides that “private property [shall not] be taken for public use without just compensation,” see, e.g., Complaint, ¶ 106 [emphasis added]; and (2) the hurdle of obtaining declaratory and injunctive relief as a remedy for unconstitutional taking, where the law is clear that monetary damages are the exclusive remedy, there are several attributes that make this case unique, and, thus, not a precedent for action by others seeking to close airports. 
 Continue Reading Santa Monica Sues for Closure of Airport

The Transportation Security Agency’s (“TSA”) Screening of Passengers Through Observation Techniques (“SPOT”) program, aimed at revealing potential security issues at airports, was roundly criticized by the Government Accountability Office (“GAO”) in a report released Friday, November 15, 2013.  The report found that the results of the three year old program, employing approximately 3,000 “behavior detection officers” at 146 of the 450 TSA regulated U.S. airports are unvalidated, that the model used to confirm the program’s efficacy was flawed and inconclusive, and that the report used improper control data and methodology and, thus, lacks scientific proof that the program could identify potential assailants. 

The program’s critics include Steven Maland, a GAO Managing Director, Representative Benny Thompson of Mississippi, ranking Democrat on the House of Representative’s Homeland Security Committee, and the Chairman of that Committee, Michael McCall of Texas, all of whom take the position that “the proof is in the pudding.”  They cite the recent attack by a gunman at LAX during which TSA officers at the security checkpoint failed to push the panic button to alert local authorities, but instead used an abandoned landline, giving the gunman the opportunity of four minutes and 150 rounds of ammunition before he was stopped.
 Continue Reading $900 Million TSA SPOT Program Found Useless