United States Court of Appeals, District of Columbia Circuit
Air Line Pilots Association, International, et al., Petitioners
Elaine L. Chao, Secretary of the United States Department of Transportation, Respondent Norwegian Air International Limited, Intervenor
February 23, 2018
Petition for Review of an Order of the United States
Department of Transportation
Russell Bailey argued the cause for petitioners. With him on
the briefs were Jonathan A. Cohen, David M. Semanchik, Edward
J. Gilmartin, James P. Clark, Jonathan Elifson, and Stella
Swingle, Attorney, U.S. Department of Justice, argued the
cause for respondent. With her on the brief was Michael S.
G. Allen and Kevin M. Fong were on the brief for intervenor
Norwegian Air International Limited in support of respondent.
Before: Rogers and Tatel, Circuit Judges, and Sentelle,
Senior Circuit Judge.
airline-employee unions challenge the Secretary of
Transportation's award of a foreign air carrier permit to
Norwegian Air International Limited, arguing that the
airline's business model and labor practices are not in
the public interest. Though the unions have Article III
standing to challenge the Secretary's decision, their
petition fails on the merits as neither federal law nor
international agreement requires the Secretary to deny a
permit on freestanding public-interest grounds where, as
here, an applicant satisfies the requirements for obtaining a
foreign airline seeking to fly to or from the United States
must secure a permit from the Secretary of Transportation.
See 49 U.S.C. § 41301. The Secretary is
authorized by 49 U.S.C. § 41302 to issue a permit where
an applicant is "fit, willing, and able, " and
either (A) "is qualified, and has been designated"
to provide the air service by its home country under an
international agreement or (B) will provide service that is
in the "public interest." We shall explore the text
of this provision and, in particular, its public-interest
component much more closely below.
Transport Agreement between the United States and the
European Union countries also governs issuance of permits to
those nations' airlines. See Air Transport
Agreement, June 16-21, 2011, 2011 O.J. (L 283) 3
(incorporating an earlier version of the Agreement,
see Air Transport Agreement Between the United
States and the European Community and Its Member States, Apr.
25-30, 2007, 46 I.L.M. 470 ("2007 Agreement"), and
its subsequent amendment, see Protocol to Amend the
Air Transport Agreement Between the United States of America
and the European Community and Its Member States, June 24,
2010, 2010 O.J. (L 223) 3 ("2010 Protocol")).
Article 4 requires that the United States grant a permit to a
covered European carrier "with minimum procedural delay,
" provided the applicant satisfies certain citizenship
and fitness criteria and maintains safety and security
requirements detailed elsewhere. 2007 Agreement art. 4. Under
Article 6 bis-"bis" means
"second" and describes a new provision inserted
after an existing one- the United States must, absent
"specific reason for concern, " recognize fitness
and citizenship determinations made by an airline's home
nation "as if such a determination had been made by its
own aeronautical authorities." 2010 Protocol art. 2
(adding Article 6 bis to the 2007 Agreement). Lastly
for our purposes, Article 17 bis, titled
"Social Dimension"-whose text we shall also explore
below-expresses the "importance of the social dimension
of the Agreement" and recognizes "the benefits that
arise when open markets are accompanied by high labour
standards." 2010 Protocol art. 4 (adding Article 17
December 2, 2013, Norwegian Air International Limited
("Norwegian")-an airline that, despite its name, is
based in Ireland-applied to the Secretary of Transportation
for a foreign-carrier permit. See Application of
Norwegian Air International Limited for an Exemption and
Foreign Air Carrier Permit, Docket No. DOT-OST-2013-0204-0001
(Dec. 2, 2013), Joint Appendix (J.A.) 1. Shortly thereafter,
Norwegian received an Air Operator Certificate and operating
licenses from the Irish authorities authorizing it to provide
service under the Air Transport Agreement. See
Letter from Leo Varadkar, Minister, Ireland Department of
Transport, Tourism and Sport, to Anthony R. Foxx, Secretary,
U.S. Department of Transportation (Feb. 13, 2014), J.A. 254.
unions and others from the United States and Europe,
including petitioners here-Air Line Pilots Association,
International; Association of Flight Attendants-CWA; Allied
Pilots Association; and Southwest Airlines Pilots'
Association (the "Unions")-opposed Norwegian's
application. In their comments, these opponents claimed that
Norwegian, a subsidiary of Norway's flag carrier, used
Ireland as a "flag of convenience" by
"establish[ing] itself in Ireland to evade the social
laws of Norway in order to lower the wages and working
conditions of its air crew, " including by hiring pilots
and cabin crew from a Singaporean third-party contractor.
Order to Show Cause, Docket No. DOT-OST-2013-0204-0223, at 3
(Apr. 15, 2016), J.A. 417.
April 15, 2016, the Secretary issued an order tentatively
approving Norwegian's application for a permit.
Acknowledging that Norwegian's application and, in
particular, its labor practices "present[ed] novel and
complex issues, " the Secretary nonetheless concluded
that neither Article 17 bis nor section 41302
allowed the denial of a permit on public-interest grounds
where the applicant was qualified, as was Norwegian, and the
Secretary was obligated under the Air Transport Agreement to
grant the permit "with minimum procedural delay."
Id. at 7, J.A. 421. In interpreting the Air
Transport Agreement, the Secretary solicited the views of the
State Department and the Justice Department's Office of
Legal Counsel (OLC), both of which concluded-as had the
Department of Transportation's General Counsel-that
Article 17 bis provides no independent basis for
rejecting an otherwise qualified applicant. Id. And
section 41302, the Secretary explained, allows permit
issuance for service that is either authorized under an
international agreement or in the public interest. Because
the Air Transport Agreement required the United States to
grant Norwegian's permit, the Secretary found the former
condition satisfied and did not consider the latter.
Id. at 6-8, J.A. 420-22.
months later, the Secretary issued, over the Unions'
objection, a final order awarding Norwegian a foreign air
carrier permit. Final Order, Docket No.
DOT-OST-2013-0204-15123 (Dec. 2, 2016) ("Final
Order"), J.A. 569. Reiterating that Norwegian's
application was "among the most novel and complex
[cases] ever undertaken, " the Secretary again concluded
that "the law and [the United States'] bilateral
obligations leave [the Secretary] no avenue to reject
[Norwegian's] application." Id. at 3-4,
J.A. 571-72. The Unions petitioned for review, and Norwegian
intervened on the Secretary's behalf. Before evaluating
the merits of the Unions' petition, we must consider the
Secretary's argument that they lack Article III standing.
"'irreducible constitutional minimum' of
standing consists of three elements": "[t]he
plaintiff must have (1) suffered an injury in fact, (2) that
is fairly traceable to the challenged conduct of the
defendant, and (3) that is likely to be redressed by a
favorable judicial decision." Spokeo, Inc. v.
Robins, 136 S.Ct. 1540, 1547 (2016) (quoting Lujan
v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)).
This court, relying on a well-established principle of
competitor-standing doctrine that "when [government
action] illegally structure[s] a competitive environment . .
. parties defending concrete interests . . . in that
environment suffer legal harm under Article III, "
Shays v. Federal Election Commission, 414 F.3d 76,
87 (D.C. Cir. 2005), has consistently held that union members
have standing to challenge agency action authorizing
competitive entry into their employers' markets. In our
most recent case, International Brotherhood of Teamsters
v. Department of Transportation, 724 F.3d 206 (D.C. Cir.
2013), we held that truck-drivers' associations had
standing to challenge a Department of Transportation program
allowing Mexico-domiciled trucking companies to operate in
the United States, because "absent the . . . program,
members of these groups would not be subject to increased
competition from Mexico-domiciled trucks operating throughout
the United States, " id. at 211-12; see
also Clifford v. Peña, 77 F.3d 1414, 1416-17
(D.C. Cir. 1996) (holding that maritime unions had ...