Legend Terminal Owners May Still Appeal, Pursue Claim

A US District Court Judge on Wednesday threw out a lawsuit against last year's compromise on the Wright Amendment, ruling the city of Dallas did not violate any laws when it tore down the former Legend terminal at city-owned Dallas Love Field.

Judge Sidney Fitzwater ruled against Love Terminal Partners LP and Virginia Aerospace LLC, owners of the six-gate terminal built for now-defunct Legend Airlines. Both parties argued the city illegally bulldozed the terminal earlier this year, as a condition of the 2006 Wright agreement limiting Love Field to a maximum of 20 gates.

The partners had hoped to lure Pinnacle Airlines to use the terminal. They argued the parties involved in the Wright compromise -- the cities of Dallas and Fort Worth, American Airlines and Southwest Airlines, and the DFW International Airport Board -- violated federal anti-trust laws when they agreed to limit competition at Love in June 2006.

"We're disappointed in the analysis," Bill Brewer, attorney for the plaintiffs, told the Dallas Morning News. "But he's a fine judge. He obviously worked hard on the opinion. We'll consider whether or not we'll appeal. The upshot of the opinion was that this was a federal taking of our property."

The parties are still reportedly considering the pursuit of a claim in the Federal Court of Claims, seeking to recoup the estimated $100 million value of a contract Pinnacle offered for leasehold rights in 2006, before news broke of the compromise agreement.

As ANN reported, the compromise on the Wright Amendment -- which limited flights from Love Field to neighboring states, ostensibly to reduce competition to Dallas/Fort Worth International Airport -- was signed into law by President Bush last October. It calls for the repeal of Wright in 2014; until then, airlines flying from DAL may "through-ticket" to other destinations.

"The city of Dallas is delighted with Judge Fitzwater's decision," said Robert C. Walters, an attorney at the law firm Vinson & Elkins, which represented the city. "Judge Fitzwater has properly interpreted and enforced the will of Congress when it enacted the Wright Amendment Reform Act. This is an important victory for North Texas air travelers."

Fitzwater noted the compromise may indeed restrict competition in the short term, but Congress already approved the plan.

"Considered together, it is clear that Congress intends as the default rule that anticompetitive conduct be broadly prohibited by law," Fitzwater wrote in his opinion. "But in the case of airline competition in the North Texas region, Congress is willing to tolerate and sanction some anticompetitive behavior as a means of effecting the eventual end to the Wright Amendment restrictions that hamstring domestic flights to and from Love Field."

So far, the compromise has worked to greatly increased traffic at Love. The DMN notes traffic for September 2007 was up at Love by 16 percent -- including a 22 percent increase for Southwest -- over the same period in September.

FMI: www.southwest.com, www.dallas-lovefield.com, www.dallascityhall.com