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Air Line Pilots Association, International v. Chan

United States Court of Appeals, District of Columbia Circuit

May 11, 2018

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

          Argued February 23, 2018

          On Petition for Review of an Order of the United States Department of Transportation

          R. 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 Dulanya.

          Sharon Swingle, Attorney, U.S. Department of Justice, argued the cause for respondent. With her on the brief was Michael S. Raab, Attorney.

          Thomas 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.



         Four 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 permit.


         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.

         The Air 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 bis).

         On 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.

         Airline-employee 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.

         On 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.

         Several 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.


         The "'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 ...

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