American Airlines, Inc. et al. v. Dept. of Transportation
Cite as: 202 F.3d 788



No. 99-60008


No. 99-60239

Petitions for Review of an Order of the U.S. Department of Transportation

February 1, 2000
REVISED March 27, 2000

Before DUHÉ, BARKSDALE, and EMILIO M. GARZA, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:

This consolidated appeal involves respondent Department of Transportation's ("DOT's") interpretation of federal law governing airline service at Love Field airport. Petitioners Dallas-Fort Worth International Airport Board ("DFW Board"), City of Fort Worth ("Fort Worth"), American Airlines, Inc. ("American"), City of Dallas ("Dallas"), Southwest Airlines Company ("Southwest"), and Love Field Citizens Action Committee (the "Committee") petition for review of DOT's declaratory, procedural, and reconsideration orders. Legend Airlines, Inc. ("Legend"), Continental Airlines, Inc. ("Continental") and Continental Express, Inc. ("Continental Express") have intervened. For the reasons set forth below, we affirm.


Prior to 1968, Dallas and Fort Worth operated independent and competing airports. One of Dallas's airports was Love Field. DOT's predecessor agency, the Civil Aeronautics Board ("CAB"), found that the competition between Dallas's and Fort Worth's airports was harmful. Accordingly, in 1964 CAB ordered the cities to build a jointly-operated airport that would serve as the region's primary airport. The cities responded by creating the DFW Board and by jointly adopting the 1968 Regional Airport Concurrent Bond Ordinance (the "Ordinance"). The Ordinance authorized the issuance of bonds to finance the Dallas-Fort Worth Airport ("DFW"). Of critical importance here is section 9.5 of the Ordinance, which contained the cities' agreement to "take such steps as may be necessary, appropriate and legally permissible . . . to provide for the orderly, efficient and effective phase-out at Love Field, Redbird, GSIA and Meacham Field, of any and all Certificated Air Carrier Services, and to transfer such activities to the [DFW] Regional Airport."

The eight CAB-certified air carriers who were using the Dallas and Fort Worth airports first signed "letter agreements" and then later signed "use agreements" with the DFW Board, agreeing to move their air services to DFW as specified in the Ordinance. Southwest, which was solely running intrastate flights from Love Field and thus was exempt from CAB certification and pressure, refused to move to DFW and did not sign a use agreement. Litigation ensued over efforts to force Southwest from Love Field, terminating with our statement that "Southwest Airlines Co. has a federally declared right to the continued use of and access to Love Field, so long as Love Field remains open." Southwest Airlines Co. v. Texas Int'l Airlines, Inc., 546 F.2d 84, 103 (5th Cir. 1977).

Congress deregulated the airline industry in 1978. Shortly thereafter, Southwest applied for permission to provide interstate service between Love Field and New Orleans. CAB granted the application, concluding that it lacked power to deny it. This prompted Congress to intervene by enacting the Wright Amendment. See Pub. L. No. 96-192, 29, 94 Stat. 35, 48-49 (1980). TheWright Amendment generally bans interstate service from Love Field. [FN 1] However, it provides certain exemptions from this ban, two of which are significant here: (1) the commuter airline exemption allows interstate "air transportation provided by commuter airlines operating aircraft with a passenger capacity of 56 passengers or less"; and (2) the contiguous state exemption allows flights to and from Louisiana, Arkansas, Oklahoma, and New Mexico, if the flights do not "provide any through service or ticketing with another air carrier" and do not "offer for sale transportation to or from . . . any point which is outside any such State." Id.

[FN 1] In its entirety, the Wright Amendment states:

(a) Except as provided in subsection (c), notwithstanding any other provision of law, neither the Secretary of Transportation, the Civil Aeronautics Board, nor any other officer or employee of the United States shall issue, reissue, amend, revise, or otherwise modify (either by action or inaction) any certificate or other authority to permit or otherwise authorize any person to provide the transportation of individuals, by air, as a common carrier for compensation or hire between Love Field, Texas, and one or more points outside the State of Texas, except (1) charter air transportation not to exceed ten flights per month, and (2) air transportation provided by commuter airlinesoperating aircraft with a passenger capacity of 56 passengers or less.

(b) Except as provided in subsections (a) and (c), notwithstanding any other provision of law, or any certificate or other authority heretofore or hereafter issued thereunder, no person shall provide or offer to provide the transportation of individuals, by air, for compensation or hire as a common carrier between Love Field, Texas, and one or more points outside the State of Texas, except that a person providing service to a point outside of Texas from Love Field on November 1, 1979 may continue to provide service to such point.

(c) Subsections (a) and (b) shall not apply with respect to, and it is found consistent with the public convenience and necessity to authorize, transportation of individuals, by air, on a flight between Love Field, Texas, and one or more points within the States of Louisiana, Arkansas, Oklahoma, New Mexico, and Texas by an air carrier, if (1) such air carrier does not offer or provide any through service or ticketing with another air carrier or foreign air carrier, and (2) such air carrier does not offer for sale transportation to or from, and the flight or aircraft does not serve, any point which is outside any such State. Nothing in this subsection shall be construed to give authority not otherwise provided by law to the Secretary of Transportation, the Civil Aeronautics Board, any other officer or employee of the United States, or any other person.

(d) This section shall not take effect if enacted after the enactment of the Aviation Safety and Noise Abatement Act of 1979.


In 1996, Dalfort Aviation, the parent corporation of Legend, announced plans to take advantage of the commuter airline exemption by reconfiguring large commuter planes to hold only 56 seats. In response, the DOT General Counsel issued an opinion holding that the exemption applied only to aircraft originally configured to seat less than 57 passengers. The DOT opinion was mooted by the 1997 passage of the "Shelby Amendment" (collectively with the Wright Amendment, the "Love Field amendments"). The Shelby Amendment defined the term "passenger capacity of 56 passengers or less" in the commuter airline exemption to "include[] any aircraft, except aircraft exceeding gross aircraft weight of 300,000 pounds, reconfigured to accommodate 56 or fewer passengers if the total number of passenger seats installed on the aircraft does not exceed 56." SeePub. L. No. 105-66, 337, 111 Stat. 1425, 1447 (1997). [FN 2] The Shelby Amendment also expanded the contiguous states exemption to allow direct flights between Love Field and airports within Kansas, Alabama, and Mississippi. See id.

[FN 2] The Shelby Amendment provides in its entirety that:

(a) IN GENERAL.--For purposes of the exception set forth in section 29(a)(2) of the International Air Transportation Competition Act of 1979 (Public Law 96-192; 94 Stat. 48), the term "passenger capacity of 56 passengers or less" includes any aircraft, except aircraft exceeding gross aircraft weight of 300,000 pounds, reconfigured to accommodate 56 or fewer passengers if the total number of passenger seats installed on the aircraft does not exceed 56.

(b) INCLUSION OF CERTAIN STATES IN EXEMPTION.--The first sentence of section 29(c) of the International Air Transportation Competition Act of 1979 (Public Law 96-192; 94 Stat. 48 et seq.) is amended by inserting "Kansas, Alabama, Mississippi," before "and Texas".

(c) SAFETY ASSURANCE.--The Administrator of the Federal Aviation Administration shall monitor the safety of flight operations in the Dallas-Fort Worth metropolitan area and take such actions as may be necessary to ensure safe aviation operations. If the Administrator must restrict aviation operations in the Dallas-Fort Worth area to ensure safety, the Administrator shall notify the House and Senate Committees on Appropriations as soon as possible that an unsafe airspace management situation existed requiring the restrictions.


The parties in this case responded in various ways to the Shelby Amendment. Southwest began offering flights between Love Field and Mississippi and Alabama. Legend has announced plans to offer longhaul service to states outside the Love Field service area using large aircraft reconfigured to have less than 57 seats. Continental Express plans to use regional jets with less than 57 seats to fly between Love Field and Cleveland. Continental Express and American offer intrastate flights from Love Field to their hubs, in Houston and Austin respectively.

In response, Fort Worth sued Dallas, the DFW Board, Legend, Continental, and Continental Express in Texas state court to block the proposed additional service from Love Field. The state court found that the Ordinance was not preempted by federal law and that Dallas was obligated by the Ordinance to preclude airlines from flying between Love Field and areas outside Texas and the four-state service area authorized by the Wright Amendment. The state action is currently on appeal, although the state appellate court has stayed the appeal pending our resolution of this case.

While the state court action was pending, Dallas filed a federal suit against DOT and FortWorth requesting declaratory relief on essentially the same issues involved in the state action. The federal court has stayed that proceeding pending resolution of the instant case.

At the urging of several of the parties, and while both the federal and state actions were pending, DOT initiated the interpretative proceeding that is the subject of this petition for review. DOT issued an order informing the parties in this action [FN 3] that it intended to rule on four "federal law issues" and allowing the parties an opportunity to submit comments on these issues. Subsequently, in response to the parties' initial comments, DOT issued a procedural order which, inter alia, granted the DFW Board's request to resolve a fifth legal issue and granted several parties' request for anextension of time in which to file comments.

[FN 3] Notice of this order was not sent to the Committee. The Committee subsequently learned of the proceeding and DOT granted its request for an extension of time to file comments.

DOT ultimately issued a "Declaratory Order" resolving the five questions it had set forth. Specifically, DOT ruled that:

(i) the City of Fort Worth may not enforce any commitment by the City of Dallas .. . to limit operations at Love Field authorized by federal law, and the proprietary powers of the City of Dallas do not allow it to restrict services at Love Field authorized by federal law; (ii) the ability of the City of Dallas to limit the type of airline service operated at Love Field is preempted by the Wright and Shelby Amendments; (iii) any airline operating aircraft with a passenger capacity of no more than 56 passengers and a gross aircraft weight of no more than 300,000 pounds may operate service with any type of equipment and flights of any length from or to Love Field, notwithstanding any claim that such service violates any agreement between the Cities of Dallas and Fort Worth; (iv) the Dallas-Fort Worth International Airport Board may not enforce any contract provision that allegedly bars an airline from operating interstate airline service at another airport in the Dallas-Fort Worth metropolitan area; and (v) any airline may offer through service between Love Field and any other point to passengers using a flight between Love Field and another point within Texas operated under subsection (a) of the Wright Amendment, as amended by the Shelby Amendment . . . .

Declaratory Order at 58. In an accompanying "Procedural Order," DOT rejected various procedural objections raised by the parties. DOT subsequently reaffirmed its rulings on reconsideration.


We have jurisdiction to review DOT's declaratory order by this petition for review. See 49U.S.C. 46110(e) ("[A] person disclosing a substantial interest in an order issued by the Secretary of Transportation . . . may apply for review of the order by filing a petition for review in the . . . court of appeals of the United States for the circuit in which the person resides or has its principal place of business."). The standard of review we apply differs according to the specific action DOT took. Our review of DOT's interpretation of the statutes it is charged with administering is governed by the two-step standard of review established in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed.2d 694 (1984). We first determine whether Congress directly spoke to the precise question in issue. If the intent of Congress is clear, then we, and the agency, must give effect to the unambiguously expressed intent of Congress. See id. at 842-43, 104 S. Ct. at 2781, 81 L. Ed. 2d at __. If Congress has not directly addressed the precise question in issue, we ask whether the agency's interpretation was "based on a permissible construction of the statute." Id. at 843, 104 S. Ct. at 2782, 81 L. Ed. 2d at __. As long as the agency's construction of an ambiguous statute is permissible, it must be upheld. See id.; TexasOil & Gas Assoc. v. EPA, 161 F.3d 923, 937-38 (5th Cir. 1998).

However, we only engage in the Chevron analysis when reviewing an agency's interpretation of a statute it was charged with administering. When reviewing DOT's interpretation of a statute it is not charged with administering, we do not grant DOT Chevron deference. See American Forest and Paper Ass'n v. EPA, 137 F.3d 291, 297 (5th Cir. 1998) ("We do not, however, accord Chevrondeference to EPA's interpretation of the ESA, because the ESA is not a statute that EPA is charged with administering.").


Several of the parties challenge DOT's declaratory order on procedural grounds. They argue that: (a) DOT violated the Administrative Procedure Act ("APA"), (b) its order improperly contravened the earlier state court ruling on the same issues, and (c) DOT failed to comply with environmental requirements before issuing its order.


Fort Worth and the DFW Board argue that DOT's ruling violated the APA in various ways. See 5 U.S.C. 706 (directing a reviewing court to "hold unlawful and set aside agency action, findings, and conclusions found to be . . . without observance of procedure required by law"). Although DOT has already rejected some of these challenges in its earlier rulings, we review de novoDOT's interpretation and application of the APA. See Professional Reactor Operator Soc. v. U.S. Nuclear Regulatory Comm'n, 939 F.2d 1047, 1051 (D.C. Cir. 1991) ("The Supreme Court has indicated, however, that reviewing courts do not owe the same deference to an agency's interpretation of statutes that, like the APA, are outside the agency's particular expertise and special charge to administer.").


Several parties contend that DOT failed to provide them with sufficient notice as required under 554(b) or, alternatively, 553, of the APA. We exercise plenary review over whether DOT complied with applicable procedures. See Chemical Mfrs. Ass'n v. EPA, 870 F.2d 177, 198 (5 th Cir.1989).

DOT issued its declaratory order after conducting an informal adjudication, pursuant to its authority under 554(e) to "issue a declaratory ruling to terminate a controversy or remove uncertainty." 5 U.S.C. 554(e); see also Texas v. United States, 866 F.2d 1546, 1555 (5th Cir. 1989) ("The ICC's declaratory order was issued after an informal adjudication pursuant to the authority conferred by 5 U.S.C. 554(e) to 'issue a declaratory ruling to terminate a controversy or remove uncertainty.' Rendered in a specific factual context and resolving only the questions presented by [the petitions], it 'belongs to the genre of adjudicatory rulings.'") (citations omitted). Several parties object to DOT's failure to adhere to the APA's notice requirements for formal adjudications. However, in the absence of a statute requiring an agency to conduct its adjudication "on the record after opportunity for agency hearing," 5 U.S.C. 554(a), an agency can define its own procedures for conducting an informal adjudication. See Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S.633, 655-56, 110 S. Ct. 2658, 2680-81,110 L. Ed. 2d 563, __ (1990).

While the APA does not expressly require notice in informal adjudications, courts have inferred a requirement that there be "some sort of procedures for notice [and] comment . . . as a necessary means of carrying out our responsibility for a thorough and searching review [of agency action]." Independent U.S. Tanker Owners Committee v. Lewis, 690 F.2d 908, 923 (D.C. Cir. 1982). Here, DOT issued an order in which it specified the legal issues on which it would rule, allowed the parties to submit comments on these issues, and extended the comment period at the request of several parties. It then ruled on precisely the issues that it identified. We find that DOT's actions satisfied the minimum procedural notice requirements. See id.

Fort Worth contends that DOT failed to comply with 554(b) by neglecting to notify parties that DOT would also be considering a factual issue: the effect of increased service at Love Field on DFW Airport. This argument fails for two reasons. First, as noted, the formal notice requirementof 554(b) does not apply to an informal adjudication. Second, the parties were effectively on notice of this issue since it was one that they could reasonably expect to arise given the issues of which DOT gave notice. Cf. Boston Carrier Inc. v. Interstate Commerce Comm'n, 746 F.2d 1555, 1559 (D.C. Cir. 1984) ("The Commission is not burdened with the obligation to give every applicant a complete bill of particulars as to every allegation that carrier will confront."). The fact that Dallas, Continental Express, and Legend all submitted factual evidence to DOT should also have put Fort Worth on notice that it could submit its own factual evidence.

We also note the absence of anything in the record to indicate that Fort Worth possesses anyinformation bearing on the impact of increased service at Love Field. Fort Worth has had three opportunities to present or identify such evidence -- during the comment period, in its motion for reconsideration, and in its brief on appeal -- but has not demonstrated that it possesses relevant factual information not considered by DOT. This continued failure to identify the evidence it would have submitted indicates that Fort Worth was not prejudiced by any inadequacy in DOT's notice. See 5 U.S.C. 706 (in reviewing an agency determination, "due account shall be taken of the rule of prejudicial error"); Friends of Iwo Jima v. Nat'l Capital Planning Comm'n, 176 F.3d 768, 774 (4th Cir. 1999) ("Moreover, the party who claims deficient notice bears the burden of proving that any such deficiency was prejudicial.").

We also reject the DFW Board's argument that DOT's order amounts to a substantive rule subject to the notice and comment provision of 553. Agencies have discretion to choose between adjudication and rulemaking as a means of setting policy. See NLRB v. Bell Aerospace Co. Div. of Textron, Inc., 416 U.S. 267, 294, 94 S. Ct. 1757, 1771, 40 L. Ed.2d. 134, __ (1974); Mobil Exploration and Producing North America, Inc. v. FERC, 881 F.2d 193, 198 (5th Cir. 1989) (citing Bell Aerospace). In determining whether an agency action constituted adjudication or rulemaking, we look to the product of the agency action. We also accord significant deference to an agency's characterization of its own action. See British Caledonian Airways, Ltd. v. Civil Aeronautics Bd.,584 F.2d 982, 992 (D.C. Cir. 1977) ("In the present case we have, moreover, the Board's own assertion that its order is purely interpretive, and this contention in itself is entitled to a significant degree of credence . . . . While declaratory orders differ in some respects from interpretive rules, the same rationale should apply equally to an agency's characterization of one of its rulings as a declaratory order."). Since the APA defines "adjudication" as the "agency process for formulating an order," 5 U.S.C. 551(7), and DOT classifies its ruling as a declaratory order, we find that the agency engaged in adjudication rather than rulemaking. Furthermore, because DOT's order interpreted the rights of a small number of parties properly before it, DOT did not abuse itsdiscretion by acting through an adjudicatory proceeding. See British Caledonian Airways, 584 F.2dat 992-94; Mobil Exploration, 881 F.2d at 199 (finding no abuse of discretion where, inter alia, an agency proceeded by adjudication to resolve an issue affecting a small number of parties).


Fort Worth, joined by American, also argues that it was deprived of its right to a fair agency determination because of ex parte contacts between Continental Express, Legend, and DOT. Fort Worth cites specific instances when Continental Express and Legend officials contacted DOT about the pending state and federal court actions and asked DOT to intervene in these actions. The officials suggested specific actions which DOT could take and strongly advocated for DOT's intervention, including by characterizing the state court proceedings in unfavorable terms. DOT responded at one point with a written letter answering four questions posed by Continental. DOT and Legend do not dispute that the contacts took place, but they both argue that the contacts were proper and did not bias DOT's final decision.

DOT regulations prohibit certain ex parte contacts between agency personnel and interested parties. [FN 4] See 14 C.F.R. 300.2(a). Most of the contacts here fall outside these regulations because they occurred before DOT instituted its interpretation proceeding.  See 14 C.F.R. 300.2(a)("[T]here shall be no substantive communication in either direction between any concerned DOT employee and any interested person outside DOT, concerning a public proceeding, until after final disposition of the proceeding.") (emphasis added); id. 300.2(b)(4)(v) (defining a public proceeding as a "proceeding initiated by a docket filing, other than a petition for generally applicable rulemaking, after the filing in the docket of an identifiable written opposition to the initiating document") (emphasis added). Additionally, most of the contacts, including those which occurred after DOT initiated its proceeding, did not involve the merits of the proceedings but rather were permissible requests to intervene in the state and federal action. See Texas, 866 F.2d at 1550(finding that an individual's request for the Interstate Commerce Commission to intervene in a pending state action was not an ex parte communication because it did not involve the merits of the case).

[FN 4]Fort Worth also relies on the APA ban on ex parte communications, but this ban does not apply here, because it does not cover informal adjudications. See 5 U.S.C. 557(a), (d) (stating that the prohibition on ex parte contacts applies "when a hearing is required to be conducted in accordance with section 556 "); id. 556 (governing formal hearings).


The posture of the case presents more serious procedural concerns. DOT and the state court issued contrary rulings on some of the same issues in proceedings involving some of the same parties. [FN 5]

[FN 5] Although the state and DOT proceedings overlapped, neither tribunal made significant efforts to accommodate the views of the other. The state court essentially gave DOT one month to issue its declaratory order and when DOT failed to do this, the state court ruled without the benefit of DOT's views. DOT, on the other hand, did not issue its declaratory order within the time set by the state court, did not attempt to intervene in the state court action even though some of the parties there asked it to intervene, and did not ask the state court to stay its ruling until DOT ruled on the same issues. Instead, DOT rejected the state court's view in its order, noting only the state court's lack of reasoning in support of its position.

Consequently, Fort Worth, the DFW Board, and American (collectively "Fort Worth petitioners") ask us to reverse DOT's action because (1) DOT violated the full faith and credit statute, 28 U.S.C. 1738, by not granting preclusive effect to the prior state court ruling, and (2) DOT violated the Anti-Injunction Act and corresponding common law principles of federalism by issuing a declaratory order affecting a case currently pending before a state court. DOT rejected these arguments in its earlier rulings, but we do not defer to DOT's ruling on these issues. SeeAmerican Forest and Paper Ass'n, 137 F.3d at 297.


The full faith and credit statute, 28 U.S.C. 1738, generally requires federal courts to grant preclusive effect to state court judgments: "[t]he records and judicial proceedings of any court of any . . . State . . . . shall have the same full faith and credit in every court within the United States. . . as they have by law or usage in the courts of such State . . . from which they are taken." Id. The plain language of this section establishes that it does not apply here: 1738 applies only to "every court within the United States," and DOT is an agency, not a "court." Id. (emphasis added). The only other circuit to address fully this issue agrees with this reading of 1738. [FN 6] See NLRB v. YellowFreight Systems, Inc., 930 F.2d 316, 320 (3d Cir. 1991) (finding that the NLRB, by virtue of its status as an agency rather than a court, was not required to give full faith and credit to an earlier state court judgment); cf. Consolidated Oil & Gas, Inc. v. FERC, 806 F.2d 275, 280 n.5 (D.C. Cir. 1986) ("We agree with the FERC, though, that '[t]he fact that the state court ruled on the same issue, regardless whether its ruling agreed with the Commission's ruling, does not affect the Commission's authority to determine its own jurisdiction.'").

[FN 6] The Fort Worth petitioners rely on two district court cases which have arguably held to the contrary. In Torres v. Gardner, 270 F. Supp. 1 (D.P.R. 1967), the court stated in passing that "[t]he Administrative agencies of the United States are no less bound that he [sic] courts of the United States to give full faith and credit to the decisions of the Courts of Puerto Rico." Id. at 4. The court did not cite 1738, and thus it might have relied instead on the common law preclusion doctrines we discuss below. In Midgett v. United States, 603 F.2d 835 (Ct. Cl. 1979), the court cited Torres and stated: "Section 1738 of 28 U.S.C. imposes on a federal court presented with a state court judgment the same force and conclusive effect as it has in the state in which it is rendered. Administrative bodies of the United States as well as courts are required to adhere to this requirement."   Id. at 845 (citation omitted). The court did not clearly indicate that it based its holding on 1738, as opposed to merely analogizing to 1738.

We cannot conclude with certainty whether these cases relied on 1738. To the extent they did, we believe the better rule, for the reasons stated above and herein, is that 1738 does not apply to agencies, but the rationale underlying 1738 extends to agencies through common law preclusion doctrines. This rule is consonant with SupremeCourt precedent and the plain text of 1738, and it accounts for the concerns raised by the Midgett and Torres courts.

Fort Worth also argues that United States v. ITT Rayonier, Inc., 627 F.2d 996 (9th Cir. 1980) addresses thequestion presented here. In ITT Rayonier, the Ninth Circuit held that the Environmental Protection Agency ("EPA")was bound by res judicata from pursuing an enforcement action when a prior enforcement action had been litigated in state court. See id. at 999-1004. The Ninth Circuit applied res judicata because it found that the EPA was in privity with the parallel state agency which had pursued the state enforcement action. See id. at 1002-04. ITT Rayonier is distinguishable from the present case, because Fort Worth has made no showing that DOT was in privity with any party in the state court action.

The Supreme Court adopted this plain reading of 1738 when presented with the question of whether a federal court must accord full faith and credit to an unreviewed state agency proceeding. See University of Tennessee v. Elliott, 478 U.S. 788, 794, 106 S. Ct. 3220, 3224, 92 L. Ed. 2d 635,__ (1986). Reading 1738's references to "courts" as not including "agencies," the Elliott court concluded simply that " 1738 governs the preclusive effect to be given the judgments and records of state courts, and is not applicable to the unreviewed state administrative fact finding at issue in this case." Id. at 794, 106 S. Ct. at 3224, 92 L. Ed. 2d at __.

Finding that 1738 does not apply to agencies does not end our inquiry, however, as courts "have frequently fashioned federal common-law rules of preclusion in the absence of a governing statute." Id. at 794, 106 S. Ct. at 3224, 92 L. Ed. 2d at __. The Supreme Court fashioned such a rule in Elliott, requiring federal courts to grant preclusive effect to findings of fact by state agencies in most subsequent federal actions. See id. at 796-99, 106 S. Ct. at 3224-26, 92 L. Ed. 2d at __(holding also that no preclusive effect should be given to state administrative agency fact finding in Title VII cases). To determine whether common law preclusion should apply here, we consider whether the policies favoring full faith and credit, including repose and federalism concerns, see generally Allen v. McCurry, 449 U.S. 90, 95-96, 101 S. Ct. 411, 415, 66 L. Ed. 2d 308, __ (1980) ("[R]es judicata and collateral estoppel not only reduce unnecessary litigation and foster reliance on adjudication, but also promote the comity between state and federal courts that has been recognized as a bulwark of the federal system."), outweigh the federal interests present here, see Midgett, 603F.2d at 845 ("A judgment or decree of a state court whose effect would restrain the exercise of sovereign power of the United States by imposing requirements that are contrary to important and established federal policy would not be given effect in a federal court."); cf. Yellow Freight, 930 F.2d at 320 (discussing policy reasons why an agency should not be bound by 1738). See generally American Mannex Corp. v. Rozands, 462 F.2d 688, 690 (5th Cir. 1972) (suggesting, in dicta, that 1738 can be trumped by "well-defined [competing] federal policies"); 18 Charles Alan Wright, etal., Federal Practice and Procedure 4469, at 662-63 (1981) ("In various settings, federal courts have found that vital federal interests warrant rejection of the res judicata rules that state courts would apply to their own judgments.").

Applied here, the competing policy considerations weigh against requiring DOT to grant preclusive effect to the state court proceeding. [FN 7] Cf. Yellow Freight, 930 F.2d at 320-22 (holding that the NLRB was not bound by an earlier arbitrator's fact finding, even though the arbitrator's ruling was affirmed by a state court, because essential evidence was not presented to the arbitrator). First, the importance of repose here, while not insubstantial, is limited by the posture of this case. At the time the state court issued its ruling, parallel agency proceedings were already underway.

[FN 7] Because we resolve the matter on these grounds, we do not reach DOT's alternative argument that the state court judgment should not be granted preclusive effect because a Texas court would not grant the judgment preclusive effect. See generally Matsushita Elec. Indus. Co., Ltd. v. Epstein, 516 U.S. 367, 374, 116 S. Ct. 873, 878, 134 L. Ed.2d 6, __ (1996) ("When faced with a state court judgment relating to an exclusively federal claim, a federal court must first look to the law of the rendering State to ascertain the effect of the judgment.").

Second, this case involves aviation regulation, an area where federal concerns are preeminent and where DOT is charged with representing those concerns. See Northwest Airlines, Inc. v. Countyof Kent, 510 U.S. 355, 366-67, 114 S. Ct. 855, 863, 127 L. Ed. 2d 183 (1994) ("The Secretary of Transportation is charged with administering the federal aviation laws . . . ."); Northwest Airlines v. Minnesota, 322 U.S. 292, 303, 64 S. Ct. 950, 956, 88 L. Ed. 1283, __ (1944) (Jackson, J.,concurring) ("Congress has recognized the national responsibility for regulating air commerce. Federal control is intensive and exclusive."), quoted in City of Burbank v. Lockheed Air Terminal Inc., 411 U.S. 624, 633-34, 93 S. Ct. 1854, 1860, 36 L. Ed.2d 547, __ (1973); 849 U.S.C. 46101(a)(2) (granting the Secretary of Transportation discretion to "conduct an investigation . . .about . . . any question that may arise under this part"). Additionally, this case involves the operation of flights from Love Field, a matter on which Congress has twice specifically legislated. DOT's interpretive order is the first time that DOT, the agency specifically charged with administering the Wright Amendment, has interpreted the Shelby Amendment. See Cramer v.Skinner, 931 F.2d 1020, 1024 (5th Cir. 1991) (noting that "[t]he individual defendants in their official capacity, DOT, and DOT's Office of Aviation Analysis enforce the [Wright] amendment"); State of Kansas v. United States, 16 F.3d 436, 438 (D.C. Cir. 1994) (same). To allow the state court effectively to foreclose the administering agency from further consideration of the Shelby Amendment as to the parties which appeared before the state court would trump the key federal interests that motivated Congress to create DOT and give it authority over these laws. [FN 8]

[FN 8] These key federal interests are arguably lessened by the fact that DOT did not attempt to stay or intervene in the state court action; presumably if the federal interests were that important, DOT would have taken one of these actions. DOT's inaction is partially justified by the limited amount of time it had to intervene, as the state court only stayed the proceedings before it for one month.

Finally, applying full faith and credit principles to DOT in this case would lead to inconsistent results. Cf. Access Telecommunications v. Southwestern Bell Tel. Co., 137 F.3d 605,608 (8th Cir. 1998) (noting that the primary jurisdiction doctrine, under which courts refer matters to agencies when the matters are within agency jurisdiction, is motivated in part by the desire "to promote uniformity and consistency within the particular field of regulation"). Some of the parties before DOT are litigating these issues for the first time. Forcing DOT to grant preclusive effect to the state court ruling would lead to inconsistent application of the Shelby Amendment to the parties that did not appear before the state court.

In sum, because of the important federal interests here, we decline to hold that common law preclusion doctrines apply in this case. Instead, DOT properly declined to give preclusive effect to the state court judgment. [FN 9]

[FN 9] We reject the Fort Worth petitioners' invocation of the so-called Rooker-Feldman doctrine for the same reasons. "In a nutshell, the doctrine holds that inferior federal courts do not have the power to modify or reverse statecourt judgments." Matter of Reitnauer, 152 F.3d 341, 343 (5th Cir. 1998) (applying the doctrine where "[t]he district court . . . made apparent its displeasure with the manner in which the state court interpreted and applied state law [and] such displeasure formed the basis for its reversal of the bankruptcy court's order"). As we have previously noted, theRooker-Feldman doctrine is "very close if not identical to the more familiar principle that a federal court must give full faith and credit to a state court judgment." Gauthier v. Continental Diving Servs., Inc., 831 F.2d 559, 561 (5th Cir.1987). Thus, we have not applied the Rooker-Feldman jurisdictional bar in cases where we have found it inappropriate to require a federal court to give full faith and credit to a state court judgment. See id. (not applying the Rooker-Feldman doctrine where full faith and credit does not apply because the state court judgment would not be entitled to preclusive effect under state law). We follow this practice here. The Fort Worth petitioners have not cited any cases where the Rooker-Feldman doctrine has been applied to an agency ruling on matters of federal law previously addressed by a state court. In light of the above-noted concerns, we see no reason to extend the doctrine to this context.


The Fort Worth Petitioners also argue that DOT's actions violated the Anti-Injunction Act,28 U.S.C. 2283, which provides that "[a] court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments." 28 U.S.C. 2283. We"follow the weight of authority in holding that [i]f an injunction would be barred by 2283, this should also bar the issuance of a declaratory judgment that would have the same effect as an injunction." Texas Employers' Ins. Ass'n v. Jackson, 862 F.2d 491, 506 (5th Cir. 1988) (en banc)(quotation omitted) (alteration in original); see also Travelers Ins. Co. v. Louisiana Farm Bureau Fed'n, Inc., 996 F.2d 774, 776 (5th Cir. 1993) ("[T]he district court may not consider the merits of the declaratory judgment action when 1) a declaratory defendant has previously filed a cause of action in state court against the declaratory plaintiff, 2) the state case involves the same issues as those involved in the federal case, and 3) the district court is prohibited from enjoining the state proceedings under the Anti-Injunction Act.") (emphasis in original).

As a federal agency, DOT's proceedings are exempt from the terms of 2283, which applies only to proceedings in a "court of the United States." 28 U.S.C. 2283; see also id. 451 ("As used in this title[,] [t]he term 'court of the United States' includes the Supreme Court of the United States,courts of appeals, district courts constituted by chapter 5 of this title, including the Court of International Trade and any court created by Act of Congress the judges of which are entitled to hold office during good behavior."). Further, even where an action is ongoing in a "court of the United States," an agency's presence as a party, together with the federal interest the agency represents, can trump the application of 2283. See Mitchum v. Foster, 407 U.S. 225, 235-36, 92 S. Ct. 2151,2158-59, 32 L. Ed. 2d 705, __ (1972) ("[A] third exception [to 2283], more recently developed permits a federal injunction of state court proceedings when the plaintiff in the federal court is theUnited States itself, or a federal agency asserting 'superior federal interests.'"); Texas v. United States, 837 F.2d 184, 186 (5th Cir. 1988) ("Moreover, because a federal agency seeks the injunction, the ICC's motion is not directly precluded by the strictly enforced rule of the Anti-Injunction Act,28 U.S.C. 2283."); United States v. Lemaire, 826 F.2d 387, 388 n.2 (5th Cir. 1987) ("The Act doesnot prevent the United States, or one of its agencies, from acting to protect a federal interest."). Thus, 2283 does not restrict our ability to review the agency's decision.

Fort Worth's authority to the contrary is unavailing. The case before us is clearly distinguishable from United Credit Bureau of America, Inc. v. NLRB, 454 U.S. 994, 102 S. Ct. 539,70 L. Ed. 2d 404 (1981) (Rehnquist, J., dissenting from denial of certiorari), where then-JusticeRehnquist dissented from the denial of certiorari to argue that "the concerns of federalism and comity comprehended by the Anti-Injunction Act should . . . apply to the NLRB." Id. at 997-98, 102S. Ct. at 541, 70 L. Ed. 2d at __. [FN 10] In United Credit, the NLRB ordered a party to dismiss a state court action. It did this without "consider[ing] whether the state-court proceeding interfered with its ability to consider or dispose of [the agency petitioner's] charges." United Credit, 454 U.S. at998, 102 S. Ct. at 541, 70 L. Ed. 2d at __ (noting that the state court had not yet acted). Here, the state court action, at least at the trial level, was completed, thus lessening DOT's intrusion and strengthening its reasons for issuing its own interpretation of the legal issues. Also, DOT's interest here is not its interest in resolving an individual petitioner's claim, as in United Credit, but rather its interest in avoiding piecemeal application of a federal aviation statute.

[FN 10] We note in passing that, as a denial of a petition for certiorari, the United Credit Bureau opinion is not binding authority. See Teague v. Lane, 489 U.S. 288, 296, 109 S. Ct. 1060, 1067, 103 L. Ed. 2d 334 (1989).

Additionally, we do not believe that DOT violated general principles of federalism by issuing its ruling. Although the Fort Worth Petitioners correctly note that state courts are competent to resolve matters of federal law, this does not prevent federal agencies from acting within their authority to protect federal interests. Accordingly, the cases that the Fort Worth Petitioners cite in support of their federalism arguments are clearly distinguishable. See, e.g., Giles v. NYLCare Health Plans, Inc., 172 F.3d 332, 339 (5th Cir. 1999) (holding that a district court properly remanded a state law claim after dismissing federal claims, even though one of the state law claims involved a preemption defense, because "state courts, being of equal dignity with federal courts, are equally competent to address that potential defense").


As a final procedural objection, the Committee argues that DOT improperly ruled without first preparing an environmental impact statement ("EIS"). The National Environmental Policy Act ("NEPA") directs "all agencies of the Federal Government . . . [to] include [an EIS] in every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment." 42 U.S.C. 4332(2). DOT found that it did not need to prepare an EIS, but because it is not charged with administering NEPA, its decision to not prepare an EIS is not entitled to deference. See American Forest and Paper Ass'n, 137 F.3d at 297.

The Committee argues that DOT's "decision" to allow increased flights consitutes a "major Federal action" under NEPA. We disagree. Agency decisions which "do not entail the exercise of significant discretion" do not require an EIS. Atlanta Coalition on Transp. Crisis, Inc. v. Atlanta Regional Comm'n, 599 F.2d 1333, 1344-45 (5th Cir. 1979). By enacting the Shelby Amendment, Congress, not DOT, made the decision to allow additional flights at Love Field. DOT merely issued an interpretation of federal law that it was required to adopt under the relevant statutes. [FN 11] See Sugarloaf Citizens Ass'n v. FERC, 959 F.2d 508, 513 (4th Cir. 1992) ("Other Circuits have held that when an agency has no discretion to consider environmental values implementing a statutory requirement, its actions are ministerial and not subject to NEPA."); Goos v. ICC, 911 F.2d 1283, 1296 (8th Cir. 1990) ("Because the ICC has not been granted any discretion under section 1247(d) to base its issuance of an NITU or CITU on environmental consequences, we agree that it would make little sense to force the ICC to consider factors which cannot affect its decision...."); Milo Community Hospital v. Weinberger, 525 F.2d 144, 147 (1st Cir. 1975) (finding that no EIS was necessary where "consideration of the factors that the appellant has characterized as 'environmental considerations' could not have changed the Secretary's decision"). [FN 12]
[FN 11] For example, 49 U.S.C. 41713, which DOT interpreted here, does not grant DOT discretion because Congress has defined the extent of federal preemption and has specified which state rights remain. On the other hand, when DOTapplies 41714(c), governing the award of slots to new entrants, DOT is clearly granted discretion by the statute. See49 U.S.C. 41714(c) ("If the Secretary finds it to be in the public interest and the circumstances to be exceptional, the Secretary may by order grant exemptions from the requirements under subparts K and S of part 93 of title 14, Code ofFederal Regulations, to enable new entrant air carriers to provide air transportation at high density airports.") (parentheticals omitted and emphasis added). Thus, when applying 41714, DOT follows NEPA. See, e.g., Applications of Trans States Airlines, Inc., DOT Order 98-4-21, 1998 DOT Av. LEXIS 159, at *54-*55 (1998) (conducting an environmental assessment in a 41714 determination).

[FN 12] The Committee also argues that DOT failed to follow its own environmental procedures. The Committee relies on an FAA statement of "Polices and Procedures on Considering Environmental Impacts" which, as DOT notes, is inapplicable here because it "establishes Federal Aviation Administration (FAA) policies and procedures." DOT was not acting under the auspices of the FAA in this case. Instead, DOT asserts that the relevant DOT guidelines still require major agency action before undertaking an EIS, and we agree.   See 44 Fed. Reg. 56420, 56424 (1979) ("An EIS shall be prepared for any proposed major Federal action significantly affecting the environment."); see also id. (requiring an environmental assessment when "a decision has not been make [sic] to prepare an EIS," but noting that the environmental assessment describes "the environmental impacts of a proposed action"). The Committee does not cite any contrary authority in its reply brief.

Continued in Part Two