Amicus Curiae Brief — All Nippon Airways, et al., Petitioners v. Donald Wortman, et al.
Supreme Court briefDec 13, 2017
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No. 17-659
IN THE
Supreme Court of the United States
————
ALL NIPPON AIRWAYS CO., LTD., EVA AIRWAYS CORP.,
Petitioners,
v.
DONALD WORTMAN, et al.,
Respondents.
————
On Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Ninth Circuit
————
BRIEF FOR INTERNATIONAL
AIR TRANSPORT ASSOCIATION AS AMICUS
CURIAE IN SUPPORT OF PETITIONERS
————
JEFFREY N. SHANE
General Counsel
INTERNATIONAL AIR
TRANSPORT ASSOCIATION
Route de l’Aeroport 33
P.O. Box 416
1215 Geneva Airport 15
Switzerland
+41 (0) 22 770 29 01
shanej@iata.org
WARREN L. DEAN, JR.
Counsel of Record
KATHLEEN E. KRAFT
THOMPSON COBURN LLP
1909 K Street, N.W.
Washington, D.C. 20006
(202) 585-6900
wdean@thompsoncoburn.com
Counsel for Amicus Curiae
December 13, 2017
WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D. C. 20002
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES ................................
iii
INTEREST OF AMICUS CURIAE .....................
1
SUMMARY OF ARGUMENT .............................
2
ARGUMENT ........................................................
5
I. THE NINTH CIRCUIT’S DECISION
IGNORES THE REGULATORY FRAMEWORK FOR INTERNATIONAL AIR
SERVICES AND CONFLICTS BOTH
WITH THE DOT’S ENABLING LEGISLATION AND WITH INTERNATIONAL AGREEMENTS TO WHICH
THE UNITED STATES IS A PARTY ......
5
A. The International Air Transportation
System..................................................
7
B. The International Framework For
Regulating Pricing ...............................
9
II. THE NINTH CIRCUIT’S DECISION
IMPERMISSIBLY USURPS THE DOT’S
EXCLUSIVE RESPONSIBILITY TO
EXERCISE ON BEHALF OF THE
UNITED STATES THE AUTHORITY
TO REGULATE INTERNATIONAL AIR
SERVICES ................................................
15
A. Congress Vested The DOT With
Authority Over Interstate And
Foreign Air Transportation .................
15
B. The Ninth Circuit’s Decision Would
Usurp The Regulatory Authority
Of The DOT Over Foreign Air
Transportation .....................................
16
(i)
ii
TABLE OF CONTENTS—Continued
Page
III. THE NINTH CIRCUIT’S DECISION
UNCONSTITUTIONALLY INTRUDES
UPON THE AUTHORITY OF THE
EXECUTIVE BRANCH OVER FOREIGN AIR TRANSPORTATION AND
IMPAIRS THE ABILITY OF THE
EXECUTIVE TO CONDUCT THE
FOREIGN AFFAIRS OF THE UNITED
STATES .....................................................
17
CONCLUSION ....................................................
19
iii
TABLE OF AUTHORITIES
CASES
Page(s)
Ark. La. Gas Co. v. Hall,
453 U.S. 571 (1981) ...................................
13
AT & T v. Cent. Office Tel., Inc.,
524 U.S. 214 (1998) ...................................
13
Chi. & S. Air Lines v. Waterman S.S. Corp.,
333 U.S. 103 (1948) ...................................
18
Dames & Moore v. Regan,
453 U.S. 654 (1981) ...................................
3
E. & J. Gallo Winery v. EnCana Corp.,
503 F.3d 1027 (9th Cir. 2007) ...................
6
Ginsberg v. Northwest, Inc.,
695 F.3d 873 (9th Cir. 2012), rev’d,
134 S. Ct. 1422 (2014) ...............................
6
Greater Tampa Chamber of Commerce
v. Goldschmidt,
627 F.2d 258 (D.C. Cir. 1980) ...................
8
In re N.J. Title Ins. Litig.,
683 F.3d 451 (3d Cir. 2012) ......................
13
In re Transpacific Passenger Air Transp.
Antitrust Litig.,
69 F. Supp. 3d 940 (N.D. Cal. 2014).........
7
Keogh v. Chi. & Nw. Ry. Co.,
260 U.S. 156 (1922) ...................................
13
Mont.–Dakota Util. Co. v. Nw. Pub. Serv. Co.,
341 U.S. 246 (1951) ...................................
13
Northwest, Inc. v. Ginsberg,
134 S. Ct. 1422 (2014) ...............................
6-7
iv
TABLE OF AUTHORITIES—Continued
Page(s)
Regan v. Wald,
468 U.S. 222 (1984) ...................................
18
Saunders v. Farmers Ins. Exch.,
440 F.3d 940 (8th Cir. 2006) .....................
13
Square D Co. v. Niagara Frontier
Tariff Bureau, Inc.,
476 U.S. 409 (1986) ...................................
13
Transmission Agency of N. Cal. v. Sierra
Pac. Power Co.,
295 F.3d 918 (9th Cir. 2002) ....................
7
Wortman v. All Nippon Airways,
854 F.3d 606 (9th Cir. 2017) ............... 13, 16, 18
STATUTES AND REGULATIONS
49 U.S.C. § 40101 .........................................
15
49 U.S.C. § 40101(a)(12)...............................
5, 9
49 U.S.C. § 40101(e) .....................................
3, 6
49 U.S.C. § 40101(e)(2) .................................
16
49 U.S.C. § 40105 ......................................... 3, 15
49 U.S.C. § 40105(a) .....................................
3
49 U.S.C. § 40105(b)(1)(A)............................
12
49 U.S.C. § 40105(e)(2) .................................
6
49 U.S.C. § 40109(c) .....................................
15
49 U.S.C. § 41507 .........................................
16
49 U.S.C. § 41509 .........................................
16
v
TABLE OF AUTHORITIES—Continued
Page(s)
49 U.S.C. § 41712(a) .....................................
9
49 U.S.C. § 41713(b) .....................................
5
Airline Deregulation Act of 1978, Pub. L.
No. 95-504, 92 Stat. 1705 .........................
3, 5
International Air Transportation Competition Act of 1979, Pub. L. No. 96-192, 94
Stat. 35 (1980) ..................................... 3, 5, 6, 16
14 C.F.R. Part 213 ........................................
9
TREATIES AND INTERNATIONAL AGREEMENTS
Air Services Agreement, U.S.-U.K., Feb. 11,
1946, 60 Stat. 1499 ...................................
8
Air Transport Agreement, Memorandum of
Understanding, U.S.-Japan, Dec. 14,
2009, https://www.state.gov/e/eb/rls/othr/
ata/j/ja/133510.htm ...................................passim
Air Transport Agreement, U.S.-S. Kor.,
June 9, 1998, https://www.state.gov/e/eb/
rls/othr/ata/k/ks/114172.htm ....................
12
Civil Air Transport Agreement, U.S.Japan, Aug. 11, 1952, 4 U.S.T. 1948 .......passim
Convention on International Civil Aviation,
Dec. 7, 1944, 61 Stat. 1180, 15 U.N.T.S.
295 ............................................................. 6, 7, 8
vi
TABLE OF AUTHORITIES—Continued
OTHER AUTHORITIES
Page(s)
Barry R. Diamond, The Bermuda
Agreement Revisited: A Look at the Past,
Present and Future of Bilateral Air
Transport Agreements, 41 J. Air L. &
Com. 419 (1975) ........................................
8
BETSY GIDWITZ, POLITICS OF INTERNATIONAL AIR TRANSPORT (1981) ..................
8
Charles A. Hunnicutt, U.S.-EU Second
Stage Air Transport Agreement: Toward
an Open Aviation Area, 39 Ga. J. Int’l. &
Comp. L. 663 (2011) ..................................
8
Joshua D. Lichtman & Carlos R. Rainer,
The Filed Rate Doctrine as Applied to
Alleged Manipulation in the Wholesale
Natural Gas Market: A Defense Perspective, The Antitrust Source (Sept. 2005),
http://www.americanbar.org/content/dam/
aba/pubishing/antitrust_source/Sep05_L
ichtman9_27.pdf ....................................... 13-14
U.S. Dep’t of State, Current Model Open
Skies Agreement Text (Jan. 12, 2012),
https://www.state.gov/e/eb/rls/othr/ata/1
14866.htm .................................................
9
U.S. Dep’t of State, Open Skies Partners
(July 14, 2017), https://www.state.gov/e/
eb/rls/othr/ata/267129.htm .......................
10
U.S. Dep’t of State, Open Skies Partnerships: Expanding the Benefits of Freer
Commercial Aviation (July 5, 2017),
https://www.state.gov/e/eb/rls/fs/2017/267
131.htm .....................................................
9
vii
TABLE OF AUTHORITIES—Continued
Page(s)
Defining “Open Skies”, Order No. 92-8-13,
1992 WL 204010 (U.S. Dep’t of Transp.
Aug. 5, 1992) .............................................
9
INTEREST OF AMICUS CURIAE1
The International Air Transport Association (IATA)
is a nongovernmental international trade association
founded in 1945 by air carriers engaged in international air services. Today, IATA consists of 282 member
airlines from 123 countries representing roughly 84
percent of the world’s total air traffic. IATA strives to
represent, lead, and serve the airline industry by
advocating the interests of airlines across the globe,
developing global commercial standards for the airline
industry, and assisting airlines in operating safely,
securely, efficiently, and economically. Since 1945,
IATA has worked closely with governments and intergovernmental organizations to achieve and maintain
a legal and regulatory framework everywhere consistent with the best interests of air transportation
users. In this connection, IATA advocates uniformity
in the development, implementation, and interpretation of numerous public and private international
treaties and agreements relating to the conduct of
international air services.
The Ninth Circuit’s decision threatens to disrupt
and compromise the integrity of the oversight and
regulation of international air transportation services.
If allowed to stand, the Ninth Circuit’s decision will
frustrate the realization of the objectives of IATA’s
1
No counsel for a party authored this brief in whole or in part,
and no party or counsel for a party or any other person other than
IATA or its counsel made a monetary contribution intended to
fund the preparation or submission of this brief. On December 1,
2017, counsel for IATA timely notified counsel of record for
Petitioners and Respondents of IATA’s intention to file this
brief. IATA’s counsel received written consent from counsel
for Petitioners on December 4, 2017 and from counsel for
Respondents on December 6, 2017.
2
member airlines in ensuring the uniform observance
of the international obligations governing those services.
The United States would be uniquely disadvantaged if
the decision is not reversed, because it would prevent
the U.S. Government from speaking with one voice in
matters of international aviation policy. Its ability to
conduct international aviation relations coherently
would be severely compromised. IATA and its members thus have a direct and substantial interest in
the issues raised by the Petitioners. Moreover, IATA
is uniquely positioned to provide the Court an
international perspective on this controversy and its
implications for the global airline industry.
SUMMARY OF ARGUMENT
IATA agrees with the arguments of Petitioners
supporting their request for a grant of certiorari in this
case. IATA files this brief to address the far-reaching
implications that the Ninth Circuit’s decision will have
on the international obligations of the United States if
certiorari is not granted. If not reversed by this Court,
the Ninth Circuit’s decision will establish a dangerous
precedent for the international air transportation
system and the United States’ ability to participate in
the continuing evolution of that system.
The Ninth Circuit’s decision withdraws the certainty of the filed rate doctrine as it relates to regulated
fares in international air transportation. The doctrine
protects the authority vested in regulatory agencies
from collateral attack and from judicial, often retroactive, rate setting. In international aviation, that
authority derives both from domestic legislation and a
complex array of agreements among sovereign nations
that authorize the conduct of international air services
and establish the framework for government oversight
of those services. That framework includes specific
3
rules for the regulation by governments of fares for
international services—rules that the Ninth Circuit
utterly ignored.
Since the enactment of the Airline Deregulation Act
of 1978 (ADA) and the International Air Transportation Competition Act of 1979 (IATCA), liberalized
rules governing the conduct of international air services have been incorporated in agreements with more
than 120 trading partners of the United States. These
agreements—formally negotiated by the U.S. Department of State with its foreign counterparts and
“supported by the strongest of presumptions and the
widest latitude of judicial interpretation” because they
are entered into pursuant to an express authorization
from Congress2—include specific mutually-agreed
rules governing the regulation of fares. Pursuant to
those agreements, the authority to oversee and
regulate fares is shared with foreign governments, and
the Department of Transportation (DOT) has exclusive regulatory authority to perform that function on
behalf of the United States, see 49 U.S.C. §§ 40101(e),
40105.
By failing to consider properly the extent to which
the DOT’s regulatory oversight of international fares
is guided by congressional mandates and formal agreements with U.S. trading partners, the Ninth Circuit
2
Dames & Moore v. Regan, 453 U.S. 654, 668 (1981)
(discussing the judicial deference given to Presidential actions
taken pursuant to an express or implied authorization from
Congress); 49 U.S.C. § 40105(a) (directing the Secretary of State
to advise and consult with the Administrator of the Federal
Aviation Administration and the Secretaries of Transportation
and Commerce about “negotiations for an agreement with a
government of a foreign country to establish or develop air
navigation, including air routes and services”).
4
reached a decision that is inconsistent with the longestablished regulatory framework for international air
services and conflicts with the international obligations of the United States. Those obligations specifically
preclude unilateral action by the United States to
disturb fares in effect for services between the United
States and Japan. The filed rate doctrine ensures the
U.S. Government’s ability to comply with these
obligations. The Ninth Circuit’s decision, if allowed to
stand, would sweep away that assurance and, in so
doing, would threaten both the U.S. Government’s
ability to comply with its international obligations and
the integrity of the international air transportation
system at large.
In sum, the decision positions the judiciary to usurp,
impermissibly, the DOT’s exclusive authority to act on
behalf of the United States in the regulation of
international fares, authority established by Congress
and enshrined in international agreements of the
United States.
In addition, by purporting to sit in judgment of
whether the DOT, acting consistent with specific
international obligations, has or has not “effectively
abdicated” its regulatory responsibilities, the decision
of the court below unconstitutionally intrudes upon
the Executive’s authority to conduct the foreign policy
of the United States. Unless reversed, the decision
would call into question the U.S. Government’s ability
to make and keep promises to trading partners
regarding the regulation of international aviation,
thereby undermining its ability to conduct foreign
policy in this vitally important commercial sector.
Understandably, the international airlines that
constitute IATA’s membership are deeply concerned.
The Ninth Circuit’s decision would create an unprece-
5
dented new obstacle to the orderly development of
international air services. Because such services
cross many borders and require agreement by many
countries, it is vital that the courts respect the international rules established by those agreements in
both form and substance. The Ninth Circuit’s decision
departs from that standard and warrants this Court’s
review.
ARGUMENT
I. THE
NINTH
CIRCUIT’S
DECISION
IGNORES THE REGULATORY FRAMEWORK
FOR
INTERNATIONAL
AIR
SERVICES AND CONFLICTS BOTH WITH
THE DOT’S ENABLING LEGISLATION
AND WITH INTERNATIONAL AGREEMENTS TO WHICH THE UNITED STATES
IS A PARTY
In a series of enactments beginning with the ADA
and the IATCA, Congress set the United States on
a path toward “efficiency, innovation, and low prices”
for air transportation through “maximum reliance on
competitive market forces.” 49 U.S.C. § 40101(a)(12);
see Airline Deregulation Act of 1978, Pub. L. No. 95504, 92 Stat. 1705, 1705 (Congress enacted the ADA to
“encourage, develop, and attain an air transportation
system which relies on competitive market forces to
determine the quality, variety, and price of air services.”). Congress included provisions to ensure that
States would not frustrate those policies with measures
of their own. 49 U.S.C. § 41713(b) (Congress expressly
prohibited States from “enact[ing] or enforc[ing] a law,
regulation, or other provision having the force and
effect of law related to a price, route, or service of an
air carrier that may provide air transportation.”).
6
Congress also tasked the DOT and the Department
of State with developing an international air transportation negotiating policy. See 49 U.S.C. § 40101(e);
International Air Transportation Competition Act of
1979, Pub. L. No. 96-192, § 17, 94 Stat. 35, 42 (1980).
Congress’s directive built on an existing framework of
international air transportation agreements, including the Convention on International Civil Aviation3
and bilateral executive agreements. Among the
objectives set forth in Congress’s mandate to the
DOT and the Department of State was “a negotiating
policy emphasizing the greatest degree of competition
compatible with a well-functioning international
air transportation system, including . . . freedom of
air carriers and foreign air carriers to offer prices
that correspond to consumer demand.” 49 U.S.C.
§ 40105(e)(2) (emphasis added).
Only a few years ago, the Ninth Circuit similarly
sought to dilute the preemptive effect of federal aviation law. Ginsberg v. Northwest, Inc., 695 F.3d 873 (9th
Cir. 2012), rev’d, 134 S. Ct. 1422 (2014). This Court
rejected, “with little difficulty,” the Ninth Circuit’s
approach and affirmed the supremacy of federal law in
the arena of air transportation.4 Northwest, Inc. v.
3
See Convention on International Civil Aviation, Dec. 7, 1944,
61 Stat. 1180, 15 U.N.T.S. 295 [hereinafter, Chicago Convention].
4
As the district court below observed,
[t]he filed rate doctrine is a judicial creation derived
from principles of federal preemption. E. & J. Gallo
Winery [v. EnCana Corp.], 503 F.3d [1027, ] 1033 [9th
Cir. 2007)]. “At its most basic, the filed rate doctrine
provides that state law, and some federal law (e.g.
antitrust law), may not be used to invalidate a filed
rate nor to assume a rate would be charged other than
the rate adopted by the federal agency in question.”
7
Ginsberg, 134 S. Ct. 1422 (2014). Now, in the decision
below, the Ninth Circuit seeks once again to erode the
supremacy of federal regulatory jurisdiction in that
same arena by narrowing the protections afforded that
jurisdiction by the filed rate doctrine. The Ninth
Circuit’s decision thus threatens not only the ability of
the United States to carry out its obligations under
international agreements, but also the ability of
IATA’s member airlines to set prices for their services
with confidence that the agencies vested with
oversight of those prices will have the final say as to
their acceptability.
A. The International Air Transportation
System
The Chicago Convention establishes the organic
framework for the international air transportation
system and its regulation. That system transports
billions of passengers annually, with an unprecedented level of safety. The success of the framework
established by the Chicago Convention, with virtually
the same number of state parties as the UN Charter,
is one of the most enduring and important accomplishments of the post-war era. The Chicago Convention
establishes the rules under which international civil
air services are conducted, confirming the sovereignty
of countries over their own airspace and requiring that
civil aircraft display the nationality of their registry.
Chicago Convention, art. 1, 17. The treaty also serves
as the charter of the International Civil Aviation
Organization, the United Nations agency responsible
Transmission Agency of N. Cal. v. Sierra Pac. Power
Co., 295 F.3d 918, 929–30 (9th Cir. 2002).
In re Transpacific Passenger Air Transp. Antitrust Litig., 69 F.
Supp. 3d 940, 953 (N.D. Cal. 2014) (footnote omitted).
8
for regulating the safety and operation of aircraft.
Chicago Convention, art. 43-96.
The Chicago Convention left to agreements among
countries the authorization of international civil air
transportation between their respective territories.
Chicago Convention, art. 6; Greater Tampa Chamber
of Commerce v. Goldschmidt, 627 F.2d 258, 259 (D.C.
Cir. 1980) (“Because every nation has exclusive sovereignty over the airspace above its territory, international
agreements are a prerequisite of international air
service.” (citation omitted)); see generally BETSY GIDWITZ,
POLITICS OF INTERNATIONAL AIR TRANSPORT (1981).
These agreements, whether bilateral or multilateral,
include a comprehensive array of rules governing the
number of airlines permitted to offer services, the
destinations to which they can fly, the frequency of
their flights, and a host of other details including, most
importantly for present purposes, the oversight by the
contracting governments of the prices charged for the
authorized services.5
Since 1992, the United States has pursued a policy
of concluding “Open Skies” agreements that “promote
an international aviation system based upon com5
The immediate post-war agreements between the United
States and its trading partners were based on a 1946 agreement
between the United States and the United Kingdom concerning
air services between their respective territories (the Bermuda
Agreement). Barry R. Diamond, The Bermuda Agreement
Revisited: A Look at the Past, Present and Future of Bilateral Air
Transport Agreements, 41 J. Air L. & Com. 419, 443 (1975); see
Air Services Agreement, U.S.-U.K., Feb. 11, 1946, 60 Stat. 1499.
The Bermuda Agreement became a precedent for approximately
3,000 other such agreements between countries. Charles A.
Hunnicutt, U.S.-EU Second Stage Air Transport Agreement:
Toward an Open Aviation Area, 39 Ga. J. Int’l. & Comp. L. 663,
668 (2011).
9
petition among airlines[,]” U.S. Dep’t of State,
Current Model Open Skies Agreement Text (Jan. 12,
2012), https://www.state.gov/e/eb/rls/othr/ata/114866
.htm, while retaining the regulatory oversight necessary to protect competition and consumers,6 see U.S.
Dep’t of State, Open Skies Partnerships: Expanding
the Benefits of Freer Commercial Aviation (July 5,
2017), https://www.state.gov/e/eb/rls/fs/2017/267131.
htm. As explained in the DOT’s Final Order promulgating the policy, “[w]e have seen much larger
dividends [in terms of the public interest] in those
markets which allow greater scope for airline price and
service initiatives.” Defining “Open Skies”, Order No.
92-8-13, 1992 WL 204010 (U.S. Dep’t of Transp. Aug.
5, 1992) (emphasis added).
B. The International
Regulating Pricing
Framework
For
Pursuant to the terms found in all U.S. air services
agreements, the power to regulate rates for international air service in any bilateral market is a joint
power exercised concurrently by the aeronautical
authorities of both the United States (the DOT) and
the other party to the bilateral air services agreement
governing that market. The 1952 Civil Air Transport
Agreement between the United States and Japan7 is
typical. It confirmed that joint authority as follows:
6
In compliance with Congress’s direction, the DOT exercises
its regulatory oversight through reliance on competition and market forces, rather than carrier cooperation, 49 U.S.C. § 40101(a)(12),
subject to broad authority to prevent competitive and consumer
injury, see, e.g., 49 U.S.C. § 41712(a); 14 C.F.R. Part 213 (foreign
air carriers).
7
This agreement is a Bermuda-type agreement. See
discussion, supra note 5. For the sake of convenience, IATA’s
10
ARTICLE 13
(A) The determination of rates in accordance
with the following paragraphs shall be made
at reasonable levels, due regard being paid to
all relevant factors, such as cost of operation,
reasonable profit, and the rates charged by
any other airlines, as well as the characteristics of each service.
(B) The rates to be charged by the airlines of
either Contracting Party between points in
the territory of the United States and points
in the territory of Japan referred to in the
attached Schedule shall, consistent with the
provisions of the present Agreement, be
subject to the approval of the aeronautical
authorities of the Contracting Parties, who
shall act in accordance with their obligations
under the present Agreement within the limits
of their legal powers.
(C) Any rate proposed by the airline or
airlines of either Contracting Party shall be
filed with the aeronautical authorities of both
Contracting Parties at least (30) days before
the proposed date of introduction; provided
that this period of thirty (30) days may be
reduced in particular cases if so agreed by the
discussion will focus on services between the United States and
Japan, of which All Nippon Airways Corp., Ltd., is a national.
IATA notes that the United States is also party to an “open skies”
agreement with Chinese Taipei (Taiwan), of which Eva Airways
Corp. is a national. U.S. Dep’t of State, Open Skies Partners (July
14, 2017), https://www.state.gov/e/eb/rls/othr/ata/267129.htm
(listing all U.S. open skies partners).
11
aeronautical authorities of both Contracting
Parties.
Civil Air Transport Agreement, art. 13(B), U.S.-Japan,
Aug. 11, 1952, 4 U.S.T. 1948 [hereinafter, 1952 Agreement] (emphasis added). Thus, regulatory authority
over air fares in international air transportation is
a joint authority exercised concurrently by the aeronautical authorities of both Japan and the United
States. It is not authority that the DOT exercises
unilaterally.
In 2009, the United States concluded an “open skies”
framework with Japan. That framework is reflected in
a Memorandum of Understanding addressing the
obligations in the original 1952 Agreement, which by
their terms otherwise remain in effect. The Memorandum of Understanding provides:
Part X. Pricing
The following procedures concerning the
application of Article 13 of the 1952
Agreement shall apply to apply all services
operated under the 2009 MOU implementing
the 1952 Agreement:
1. Each Party shall allow prices for air
transportation to be established by each
airline based upon commercial considerations
in the marketplace. Intervention by the
Parties shall be limited to:
a. Prevention of unreasonably discriminatory prices or practices;
b. Protection of consumers from prices that
are unreasonably high or restrictive due to
the abuse of a dominant position;
12
c. Protection of airlines from prices that are
artificially low due to direct or indirect governmental subsidy or support; and
d. Protection of airlines from prices that are
artificially low, where evidence exists as to an
intent to eliminate competition.
2. Each Party may require notification to or
filing with its aeronautical authorities of
prices to be charged to or from its territory by
airlines of the other Party. Such notification
or filing by the airlines may be required to be
made not later than the initial offering, in any
form, of a price.
Air Transport Agreement, Memorandum of Understanding, U.S.-Japan, Dec. 14, 2009 [hereinafter, U.S.Japan MOU] (emphasis added), https://www.state.
gov/e/eb/rls/othr/ata/j/ja/133510.htm.8 This international
agreement sets forth the standards by which each
party regulates international fares—whether or not
filed—for flights between the United States and
Japan. The DOT is statutorily obliged to comply with
these standards. 49 U.S.C. § 40105(b)(1)(A) (requiring
the Secretary of Transportation to “act consistently
with obligations of the United States Government
under an international agreement . . .”).
Without any consideration of this framework or the
statutory requirement that the DOT act consistent
with the international obligations of the United States,
the court below found that “there were genuine issues
8
The U.S. Government’s agreement with Japan on these
points is not an anomaly. For example, the same provisions
appear in its agreement with South Korea. Air Transport
Agreement, U.S.-S. Kor., June 9, 1998, https://www.state.gov/
e/eb/rls/othr/ata/ k/ks/114172.htm.
13
of material fact as to whether the DOT effectively
abdicated its authority over the unfiled air fares.”
Wortman v. All Nippon Airways, 854 F.3d 606, 614
(9th Cir. 2017). Simply put, this framework of joint
regulatory power—established by an international
agreement to which the DOT must adhere—should be
respected. It cannot be collaterally attacked by trial
court determinations of whether the DOT has
“effectively abdicated” regulatory oversight of fares.
The Ninth Circuit’s decision goes further. It allows
an action that challenges rates and charges for
international flights. See generally id. In so doing, it
inserts the judiciary into the ratemaking process. See
Square D Co. v. Niagara Frontier Tariff Bureau, Inc.,
476 U.S. 409, 422 (1986); Keogh v. Chi. & Nw. Ry. Co.,
260 U.S. 156, 162-63 (1922). This is exactly what the
filed rate doctrine is designed to prevent. In re N.J.
Title Ins. Litig., 683 F.3d 451, 457-58 (3d Cir. 2012)
(“[T]he nonjusticiability strand [of the filed rate
doctrine] recognizes that federal courts are illequipped to engage in the rate making process . . . .”
(citations omitted)); Saunders v. Farmers Ins. Exch.,
440 F.3d 940, 943 (8th Cir. 2006) (filed rate doctrine
“preserves the authority and expertise of the rateregulating agency by barring a court from enforcing
the statute in a way that substitutes the court's
judgment as to the reasonableness of a regulated rate”
(citing AT & T v. Cent. Office Tel., Inc., 524 U.S. 214,
221–23 (1998); Ark. La. Gas Co. v. Hall, 453 U.S. 571,
577–78 (1981); Mont.–Dakota Util. Co. v. Nw. Pub.
Serv. Co., 341 U.S. 246, 250–52 (1951))); see also
Joshua D. Lichtman & Carlos R. Rainer, The Filed
Rate Doctrine as Applied to Alleged Manipulation in
the Wholesale Natural Gas Market: A Defense Perspective, The Antitrust Source 1 (Sept. 2005), http://
www.americanbar.org/content/dam/aba/pubishing/anti
14
trust_source/Sep05_Lichtman9_27.pdf (“Principally,
the doctrine forbids judicial rate-setting . . . .”).
The Ninth Circuit’s allowance of even the possibility
of a damages award here (i.e., a retroactive rate)
directly contradicts the international obligations of the
United States in the 1952 Agreement, as amended by
the U.S.-Japan MOU. That Agreement specifically
prohibits both parties from “tak[ing] unilateral action
to prevent the . . . continuation of a price . . . charged
by (i) an airline of either party for international air
transportation between the Parties . . . .”9, 10 U.S.Japan MOU, Part X, § 3. All Nippon’s fares for
international air transportation were established
under the regulatory framework of the 1952 Agreement; and if the United States, acting through its
Executive Branch, is unable to change international
air fares between the United States and Japan unilaterally, then there can be no question that a court of the
United States lacks the power to set aside those fares
as well.
9
Instead, “if either Party believes that any such price is
inconsistent with the considerations set forth in paragraph 1 of
this Part, it shall request consultations and notify the other Party
of the reasons for its dissatisfaction as soon as possible.” U.S.Japan MOU, Part X, § 3.
10
In the context of this case—a putative class action covering
all persons and entities that purchased passenger air transportation for travel originating in the United States and going to
Asia or Oceania at any time since January 1, 2000, see Pet. Cert.
15-16—a breach of the United States’ obligation under this
Agreement would be significant.
15
II. THE NINTH CIRCUIT’S DECISION IMPERMISSIBLY USURPS THE DOT’S EXCLUSIVE RESPONSIBILITY TO EXERCISE
ON BEHALF OF THE UNITED STATES
THE
AUTHORITY
TO
REGULATE
INTERNATIONAL AIR SERVICES
A. Congress Vested The DOT With
Authority Over Interstate And Foreign
Air Transportation
Congress assigned the authority to regulate international air services to the DOT and instructed the DOT
to consult with the Secretary of State, as the senior
official in charge of the international affairs of the
United States, in carrying out its foreign air transportation authority. 49 U.S.C. §§ 40101, 40105. In
the case of Japan, the U.S.-Japan MOU confirms the
DOT’s authority over international air service between
the United States and Japan. U.S.-Japan MOU,
Part II:
“Aeronautical authorities” means, in the case
of the United States, the Department of
Transportation and, in the case of Japan, the
Ministry of Land, Infrastructure, Transport
and Tourism, and any person or agency
authorized to perform functions exercised by
the said Department or the said Ministry.
As the Petitioners observe, and the U.S.-Japan
MOU confirms, the DOT’s plenary statutory authority
includes the authority to relax filing requirements to
the extent it considers necessary. 49 U.S.C. § 40109(c);
U.S.-Japan MOU, Part X, § 2 (“Each Party may
require notification to or filing with its aeronautical
authorities of prices to be charged . . . .”) (emphasis
added)). The provision is squarely in line with
16
Congress’s mandate that U.S. aviation negotiating
policy promote “freedom of air carriers and foreign air
carriers to offer prices that correspond to consumer
demand.” 49 U.S.C. § 40101(e)(2). The U.S.-Japan
MOU nonetheless explicitly preserves the authority
of the United States to reject an unreasonable or
discriminatory fare, or any other fare that violates the
standards set forth in the MOU. U.S.-Japan MOU,
Part X, § 1 (allowing intervention on pricing otherwise
established based on “commercial considerations in
the marketplace” to prevent “unreasonably discriminatory prices or practices[,]” to protect “consumers
from prices that are unreasonably high or restrictive[,]” to protect “airlines from prices that are
artificially low . . .”); 49 U.S.C. § 41507 (permitting the
Secretary of Transportation to change a price “charged
or received by an air carrier or foreign air carrier
for foreign air transportation” whenever he or she
“decides that [such] price . . . is or will be unreasonably
discriminatory”); id. § 41509 (authorizing the Secretary
of Transportation to “decide whether a price for foreign
air transportation . . . is lawful”).
B. The Ninth Circuit’s Decision Would
Usurp The Regulatory Authority Of The
DOT Over Foreign Air Transportation
The Ninth Circuit’s decision would usurp the DOT’s
authority to determine what is, and is not, fair to
airline consumers by conferring on federal and
possibly even state courts the ability to engage in
retroactive ratemaking in the context of adjudicating
alleged breaches of antitrust laws. See Wortman, 854
F.3d 606. Congress vested the responsibility for
regulating international airline rates in the DOT. See
generally International Air Transportation Competition Act of 1979, Pub. L. No. 96-192, 94 Stat. 35. The
17
international air transportation system relies on
the joint authorities of countries as set forth in
international agreements to which the United States
and the DOT are bound. The United States’ participation in that system reflects the DOT’s exclusive
authority and will be hobbled by potentially
inconsistent decisions by the judiciary of the United
States.
Perhaps more importantly, if certiorari is not
granted, the Ninth Circuit’s decision will establish a
precedent that threatens to unravel the framework of
international air transportation by displacing the
DOT as the single authority empowered to act on
behalf of the United States to maintain oversight of
those services. It would replace an international air
transportation marketplace largely characterized by
the freedom to compete on price based on the
consistent application of well-established, bilaterallyagreed oversight rules with a marketplace characterized by uncertainty and confusion about the criteria
potentially applied to prices by courts throughout the
United States, both federal and state.
III. THE
NINTH
CIRCUIT’S
DECISION
UNCONSTITUTIONALLY
INTRUDES
UPON THE AUTHORITY OF THE
EXECUTIVE BRANCH OVER FOREIGN
AIR TRANSPORTATION AND IMPAIRS
THE ABILITY OF THE EXECUTIVE TO
CONDUCT THE FOREIGN AFFAIRS OF
THE UNITED STATES
The Ninth Circuit’s decision assumes for the judiciary the power to determine whether an executive
department of the United States has “effectively
abdicated” its authority over air fares in international
18
air transportation, concluding that “the DOT has not
exercised its authority to regulate . . . fares in a
manner sufficient to justify the application of the filed
rate doctrine.” Wortman, 854 F.3d at 614, 617. The
court conducted its analysis without considering the
obligations of the United States that govern the
exercise of that authority. See supra Point I.
It is not the role of the judiciary to sit in judgment
of the DOT’s implementation of the international obligations of the United States established by agreement
between the United States and another country.
Regan v. Wald, 468 U.S. 222, 242 (1984) (“Matters
relating to the conduct of foreign relations . . . are so
exclusively entrusted to the political branches of government as to be largely immune from judicial
inquiry or interference.” (quotations omitted) (citation
omitted)); Chi. & S. Air Lines v. Waterman S.S. Corp.,
333 U.S. 103, 106-08 (1948) (noting the “international
delicacy” and “strategic importance” of international
air service). The 1952 Agreement with Japan, as
amended by the U.S.-Japan MOU, explicitly governs
the DOT’s exercise of its authority to regulate the
prices charged by airlines operating services pursuant
to those accords. There can be no coherent suggestion
that the exercise by the DOT of its regulatory authority over fares in the manner set forth in that amended
agreement—wholly consistent with a statutory mandate to promote pricing freedom in international
aviation markets—is an “abdication” of the DOT’s
responsibilities.
19
CONCLUSION
For the reasons set forth herein, and in Petitioners’
brief, the Court should grant certiorari in this case.
Respectfully submitted,
JEFFREY N. SHANE
General Counsel
INTERNATIONAL AIR
TRANSPORT ASSOCIATION
Route de l’Aeroport 33
P.O. Box 416
1215 Geneva Airport 15
Switzerland
+41 (0) 22 770 29 01
shanej@iata.org
WARREN L. DEAN, JR.
Counsel of Record
KATHLEEN E. KRAFT
THOMPSON COBURN LLP
1909 K Street, N.W.
Washington, D.C. 20006
(202) 585-6900
wdean@thompsoncoburn.com
Counsel for Amicus Curiae
December 13, 2017
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