OST-2005-20407 - Carriers v. Port Authority of NY & NJ/Newark International Airport

Updated: Wednesday, July 13, 2005 11:49 AM

OST-2005-20407 - Carriers v. Port Authority of NY & NJ/Newark International Airport - Complaint

http://www.panynj.gov/

OST-2000-7285 - British Airways and Virgin v. Port Authority of NY & NJ
OST-2000-7324 - Czech Airlines v. Port Authority of NY & NJ
OST-2000-7326 - Lufthansa v. Port Authority of NY & NJ
OST-2000-7327 - Sabena, Swissair, TAP v. Port Authority of NY & NJ

Brendan Airways, LLC d/b/a USA 3000 Airlines, British Airways PLC, Scandinavian Airlines System, Societe Air France, Swiss International Airlines, Virgin Atlantic Airways Limited, Deutsche Lufthansa, AG, TAP Air Portugal, Alitalia-Linee Aeree Italiane-S.p.A., EL AL Israel Airlines Limited, Air Jamaica Limited, Singapore Airlines Limited and KLM Royal Dutch Airlines v. The Port Authority of New York and New Jersey and Newark International Airport

OST-2005-20407

February 14, 2005

Joint Complaint and Brief

The factual circumstances surrounding this Joint Complaint are curiously reminiscent of those surrounding the complaint filed by BA and Virgin, with follow-on complaints filed by Air France, SAS, Lufthansa, TAP and Swiss, among others, against the Port Authority and Newark almost exactly five years ago. That complaint, filed in Docket OST-2000-7285, also resulted from the Port Authority's unwillingness to provide affected carriers with sufficient data to enable them to evaluate the reasonableness of increased airport fees. The Department dismissed that complaint following the Port Authority's retroactive rescission of the disputed fee increases.

Exhibit A
Exhibit B
Exhibit C-H

Counsel: Pierre Murphy, 202-776-3980, pmurphy@lopmurphy.com for USA 3000 / Garofalo Goerlich, Don Hainbach, 202-776-3976, dhianbach@hhg-airlaw.com for British and Swiss / Silverberg Goldman, 202-944-3305, mgoldman@sgbdc.com for Scandinavian and Air France / Vijendran Alfreds, vijendran_alfreds@singaporeair.com.sg for Singapore Air / Arthur Molins, 516-296-9234, arthur.molins@dlh.de for Lufthansa / Vanessa Tamms, 44-1293-448-507, vanessa.tamms@fly.virgin.com for Virgin Atlantic / Steptoe & Johnson, William Karas, 202-429-6223, wkaras@steptoe.com for TAP Air Portugal / Paul Mifsud, 202-955-7993, pmisfudklm@earthlink.net for KLM / McBreen & Kopko, 516-364-1095, lkirsch@mklawnyc.com for El Al / Hogan & Hartson, George Carneal, 202-637-6546, gucarneal@hhlaw.com for Air Jamaica / Zuckert Scoutt, Richard Mathias, 202-298-8660, rdmathias@zsrlaw.com for Alitalia-Linee

February 15, 2005

Notice of Representation

Corrected Notice of Representation

Respondents submit this CORRECTED NOTICE OF REPRESENTATION because there was a typographical error in the email address for Carlene Mcintyre in the original NOTICE OF REPRESENTATION and in the line entry for Joyce Delgerico. All other aspects of the original NOTICE OF REPRESENTATION remain the same.

Please note that on the Complainants' certificate of service, it appears that either incorrect names or email addresses were supplied for the following individuals since the spelling of their last names is not consistent between their names and their email addresses:

M. Goetano	maria.gaetanoalitalia.it
Joyce Delgercio	joyce.delguercio@midwestair.com
Maria Candeloro	maria.condeloro@Alaska.com
Len Kirsh	lkirsch@mklawnye.com
W. Sekeet	Winston.skeete@airtran.com
M. Peterson	mperteson@hooters.com

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

February 14, 2004

Scheduling Notice | Word

We hereby give notice to the parties in this proceeding and all other interested persons of the following procedural dates that will govern filings in this proceeding. In order to process the complaint in an orderly and timely manner we are also directing all parties that are interested in participating or intervening in this proceeding to file such a petition or request directly with the Department.

Complaints by other carriers: February 22, 2005
Answer to the complaint(s): March 1, 2005
Petitions to participate or intervene pursuant to 14 C.F.R. 302.14 & 302.15: March 1, 2005
Reply to the Answer: March 3, 2005
Filing of letter of credit, surety bond, or suitable credit facility by respondent as required by 49 U.S.C. 47129(d)(1)(D), if applicable: March 7, 2005
Department determination as to whether a significant dispute exists pursuant to 49 U.S.C. 47129(c)(2): March 17, 2005

By: Michael Reynolds

OST-2005-20407

February 17, 2005

Notice of Names and Email Addresses

The Joint Complainants file this Notice in response to the request in Respondents' Corrected Notice of Representation to verify the names and/or e-mail addresses of certain individuals listed in the Certificate of Service attached to the Joint Complaint and Brief filed in Docket OST-05-20407 on February 14, 2005.

The correct name and e-mail address of each individual identified in Respondents' Corrected Notice of Representation is as follows:

Messina Gaetano	messina.gaetano@alitalia.it
Joyce Delguercio	joyce.delguercio@midwestairlines.com
Maria Candeloro	maria.candeloro@alaskaair.com
Leonard Kirsh	lkirsch@mklawnyc.com
Winston Skeete	winston.skeete@airtran.com
M. Peterson	mpeterson@hooters.com

The Joint Complainants also request that Respondents verify the e-mail addresses for both Steven S. Rosenthal and Jeffrey A. Tomasevich provided in Respondents' Corrected Notice of Representation. The e-mail addresses for Mr. Rosenthal and Mr. Tomasevich are listed in Respondents' Corrected Notice as "srosenthal@kayescholer.com and "jtomasevieh@kayescholer.com" respectively.

Issued February 18, 2005

Restated Scheduling Notice

Even though we are correcting the filing date of the carriers' complaints with this restated notice and thus the statutory date by which security must be provided and by which we must decide whether a significant dispute exists, we are otherwise reaffirming our decision that the following procedural schedule shall govern this case:

Complaints by other carriers, subject to any earlier filing deadline prescribed by the statute: February 22, 2005
Answer to the complaint(s): March 1, 2005
Petitions to participate or intervene pursuant to 14 C.F.R. 302.14 & 302.15: March 1, 2005
Reply to the Answer: March 3, 2005
Filing of letter of credit, surety bond, or suitable credit facility by respondent, as required by 49 U.S.C. 47129(d)(1)(D), if applicable: March 4, 2005
Department determination as to whether a significant dispute exists pursuant to 49 U.S.C. 47129(c)(2): March 16, 2005

We are issuing this restated notice because the first notice misstated the date when the complaint was filed, the date by which the respondent must file security pursuant to 49 USC 47129(d)(1)(D), if applicable, and the date by which we must determine whether a significant dispute exists pursuant to 49 U.S.C. 47129(c)(2). The complaint was filed on February 14, 2005, and the deadline for our decision on whether the complaint must be referred to an administrative law judge is March 16, 2005.

By: Michael Reynolds

February 18, 2005

Notice of Email Addresses for Respondents

We verify the e-mail addresses for Steven S. Rosenthal and Jeffery A. Tomasevich. Those e-mail addresses appear in the signature block of this filing. Also, please note that we have changed the style of our caption in a non-substantive manner.

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

OST-2005-20407

March 1, 2005

Contrary to the unsupported allegations in the Airlines' complaint concerning the consultation process-the Port Authority provided the Airlines with early notice of the proposed increase in fees, provided adequate information to the Airlines concerning the increase in fees, and met with the Airlines several times in an effort to answer all of their questions about the increase in fees. Thus, Complainants' failure to submit any testimony on the consultation process must be understood not as an innocent oversight, but as a calculated decision to obfuscate the fact that the Airlines were the ones who refused to participate in that process-a fact that would have been clear had they submitted truthful testimony about the consultation process

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

March 1, 2005

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

March 1, 2005

Airports Council International-North America Petition to Intervene

Seeks to intervene because the broad request for relief sought by certain airlines operating at Newark Liberty International Airport raises numerous important legal issues, potentially affecting the interests of many members of ACI-NA, including the interpretation of statutes, regulations, and policies concerning the reasonableness of airport fees; the "significant dispute" threshold for fast-track proceedings; the necessary level of notice, consultation, explanation of economic justification and disclosure of financial information for airport fee changes; requirements imposed on airports by various Air Service Agreements between the United States and foreign countries; and the alleged accumulation of "excessive surpluses."

Counsel: Palmer & Dodge, Arthur Berg, 212-659-7722, aberg@palmerdodge.com

March 1, 2005

Certificate of Service

By: Kara Krolikowski

March 1, 2005

Notice of Appearance for Intervenor Airports Council International-North America

Counsel: Palmer & Dodge, Arthur Berg, 212-659-7722, aberg@palmerdodge.com / Palmer & Dodge, Thomas Devine, 202-756-1486, tdevine@palmerdodge.com / Palmer & Dodge, Scott Lewis, 617-239-0162, slewis@palmerdodge.com / ACI-NA, Patricia Hahn, 202-293-8500, phahn@aci-na.org

OST-2005-20407

March 3, 2005

Answer of Joint Complainants to Respondents' Motions for Leave to File Unauthorized Documents

On March 1, 2005, Respondents filed four separate motions seeking various types of relief from the Department. Each of Respondents' Dismiss/Strike Motions was accompanied by a separate motion under 14 C.F.R. § 302.6(c) of Subpart A of the Department's Rules of Practice for leave to file an unauthorized document. It is the four motions for leave to file to which the Joint Respondents file this answer in opposition.

March 3, 2005

Joint Reply of Complainants - Bookmarked

The position espoused by Respondents in this proceeding is breathtaking in its hubris. If accepted by the Department it would nullify the consultation procedures promoted by the Department's Policy Statement Regarding Airport Rates and Charges. 61 Fed. Reg. 31994, June 21, 1996. The Policy Statement requires airports to consult with carriers before imposing or increasing fees and specifies that such consultations must be predicated on transparency.

Respondents have not engaged in meaningful consultations as the record shows. Their continuing refusal to provide that information is part of an effort to subvert the consultation process at the heart of the Policy Statement. As Respondents acknowledge, this is the second attempt by the Port Authority to increase Newark Terminal B fees in violation of the Port Authority's obligations pursuant to the Policy Statement. That the current refusal is less blatant than five years ago makes it no less unlawful. In 2000, the Port Authority was more straightforward ‑ it did not even pretend to comply with the Policy Statement.

March 4, 2005

Respondents' Motion for Leave to File an Unauthorized Document - Part One - Bookmarked

Respondents' Motion for Leave to File an Unauthorized Document - Part Two

Attachment: OST-1996-1965 - Miami International Airport Rates and Charges - Reply of the Joint Carriers - Bookmarked

The Port Authority of New York and New Jersey and Newark Liberty International Airport seek leave to file the attached "Respondents' Motion To Strike Reply Declarations of James P. Brennan, R. Bruce Rieser and Daniel P. Kaplan

Respondents' Notice of Compliance with the Credit Facility Requirement of 49 USC 47129(d)(1)(C)&(D)

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500

Order 2005-03-08
OST-2005-20407

Issued and Served March 4, 2005

Order Directing Responses to Motions

We grant each of the respondents’ motions for leave to file an unauthorized document filed on March 1, 2005, and We direct the complainant airlines to respond within two business days to the respondents’ three motions to dismiss and the respondents’ motion to strike.

By: Michael Reynolds

Order 2005-03-10
OST-2005-20407

Issued and Served March 7, 2005

Order Directing a Response to Motion | Word

We grant the respondents’ motion for leave to file an unauthorized document filed on March 4, 2005, and We direct the complainant airlines to respond within two business days to the respondents’ motion to strike the reply declarations.

By: Michael Reynolds

March 7, 2005

Errata

March 4, 2005

Re: The Council of the European Union Letter in Support of the Airlines' Complaint

The European Community and its Member States support the airlines' complaint and the airlines' request for the Department of Transportation to declare the matter a "significant dispute". They therefore request that the Department of Transportation arrange expeditiously the statutory hearing and require the disclosure of the requested information.

The statutory hearing referred to above is analogous to the obligation common to several bilateral air service agreements between Member States of the Community and the United States of America, to the effect that a Contracting Party should, within a reasonable time, undertake a review of the charging practice that is the subject of a complaint by the other Contracting Party.

The European Community and its Member States further believe that charges should not discriminate between designated airlines operating similar international air services at the same airport; that they should be transparent, just and reasonable; that reasonable notice should be given of any proposals for change; and that an exchange of relevant information is encouraged. On the facts so far available, the fee increases do not appear to meet any of these tests.

By: Council of the European Union

February 25, 2005

Re: Comments of The International Air Transport Association

The International Air Transport Association has been Informed by several Member airlines of a very substantial Increase In Terminal Charges and Federal Inspection Service Fees in Newark Terminal B. The Increases of respectively 45.5% and 63% were announced by the Port Authority of New York and New Jersey In a letter on December 17th 2004, effective February 1 2005, and will increase the operating costs of the IATA members in Terminal B by an Incredible $22 million on an annual basis.

By: Cyriel Kronenburg

March 8, 2005

Opposition of Joint Complainants to Respondents' Motion to Strike Exhibit D and Exhibit H to the Complaint

Complainants' Exhibit D shows that the Port Authority likely accumulated significant net income surpluses at Newark Terminal B in the two years before Continental's passengers were transferred to Terminal C. According to Complainants' calculations, which are based on data provided to them by the Port Authority, Terminal B generated net income surpluses in 2000 and 2001 of $31.9 million and $14.8 million, respectively. The accumulated surplus for 2000 and 2001 ($46.7 million) would fully off-set the Port Authority's $41.7 million Terminal B deficit for 2002-2004 and cover a significant portion of the Port Authority's projected $18.1 million deficit for 2005.

Opposition of Joint Complainants to Respondents' Motion to Dismiss for Failure to Comply with the Department's Rules Concerning the Contents of Complaints Filed under Sec. 47129

Complainants' review of even the rudimentary financial information set forth in those Exhibits suggested unreasonableness. As argued by Complainants, the proposed fee increases of 45 percent and 63 percent are estimated to generate $22 million in additional fees annually, a shockingly large increase that appears unreasonable on its face. Complaint, pp. 1012. Second, given the absence of even the minimum data production required by Appendix 1, the proposed increases should be found l2 unreasonable. Complaint, pp. 17-18. Finally, the proposed increases may violate the obligations to foreign carriers under bilateral agreements which require fees charged to be just, reasonable, and non‑discriminatory.

Opposition of Joint Complainants to Respondents' Motion to Dismiss Newark Liberty International Airport as an Improper Respondent

The Joint Complainants' hereby file this opposition to Respondents' motion to dismiss Newark Liberty International Airport as an improper defendant.

Respondents' motion is surprising, given that the Port Authority and Newark International Airport together filed an Answer with the Department in British Airways Plc and Virgin Atlantic Airways Limited v. The Port Authority of New York and New Jersey and Newark International Airport, Docket OST-2000-7285. Neither respondent in that matter objected to Newark International Airport's participation as a party therein.

Opposition of Joint Complainants to Respondents' Motion to Dismiss Foreign Air Carriers as Improper 47129 Complainants

The Joint Complainants' hereby file this opposition to Respondents' motion to dismiss the foreign carrier Complainants. The arguments raised by Respondents in support of their request have previously been considered and properly rejected by the Department. Respondents have provided no basis for the Department to reverse its previous determinations that foreign carriers have standing to file complaints pursuant to § 47129. Accordingly, Respondents' motion should be denied.

March 9, 2005

Opposition of Joint Complainants to Respondents' Motion to Strike the Declaration of James Brennan, R. Bruce Rieser and Daniel Kaplan

Respondents baldly allege that the filing of the reply declarations of Messrs. Brennan, Rieser and Kaplan after the Answer prejudiced Respondents' ability to respond to the Complaint, but Respondents fail to show any specific examples of such prejudice. In fact, there has been no prejudice. The Complaint and its Exhibits were sufficiently detailed to permit the Port Authority to file a 15-page Answer (advancing 11 affirmative defenses) and a 39-page brief with supporting declarations. Nowhere in their Answer or brief do Respondents assert that the Complaint failed to set forth any claims with particularity or was otherwise deficient in a manner that impeded Respondents from responding to it.

March 10, 2005

Notice on Security Requirements

The Complainants did not set forth in their complaint the amount they believed was necessary for the Respondents' to set aside, although the airlines claimed they believed $22 million to be at issue for the entire year of 2005 as a result of the fee increases. Respondents noted in their Motion to Dismiss Foreign Air Carriers as Improper § 47129 Complainants, filed on March 1, 2005, with their answer to the complaint, that the amount of $5,902,693.58 was the amount they believed necessary to reserve in order to cover possible refunds to all 13 Complainants. Complainants have not objected to this amount.

By: Michael Richards, Deputy Assistant Secretary for Aviation and International Affairs

Order 2005-3-21
OST-2005-20407

Issued and Served March 16, 2005

Instituting Order

The Department of Transportation, pursuant to 49 U.S.C. 47129(c)(2), has determined that a significant dispute exists regarding the complaint filed on February 14, 2005, by thirteen airlines against the Port Authority of New York and New Jersey and Newark Liberty International Airport, and thus the matter is assigned to an administrative law judge for an oral evidentiary hearing. The ALJ is directed to issue a recommended decision by Friday, May 13, 2005.

By: Michael Reynolds

OST-2005-20407

March 17, 2005

Notice of Assignment of Proceeding

This proceeding has been assigned to Administrative Law Judge Richard C. Goodwin. All future pleadings and other communications regarding this proceeding shall be served on him and the DOT Hearing Docket and the other persons named in the attached Service List.

By: Ronnie Yoder, Administrative Law Judge

Served March 18, 2005

Notice of Hearing on Merits

Notice is hereby given that the Hearing on the Merits will commence April 1, 2005, at 9:30 a.m. E.S.T. in Room 5332, U.S. Department of Transportation, Nassif Building, 400 Seventh Street, S.W., Washington, D.C. 20590. The Hearing shall continue on April 4, 5, 6, 7 and 8, 2005.

By: Richard Goodwin

Served March 18, 2005

Procedural Order

On or before 5:00 p.m. on March 23, 2005, each party shall deliver to the Presiding Judge at the Office of Hearings' a WRITTEN statement concerning the prospect of settlement efforts. 2 Thereafter, the parties shall deliver to the Office of Hearings by close of business each Monday until May 13, 2005, a written statement concerning prospects of settlement.

On or before 5:00 p.m., March 24, 2005, each party shall deliver to the Presiding Judge at the Office of Hearings three (3) copies of each exhibit or pleading submitted and/or filed by that party in this proceeding, or any related proceeding, consecutively numbered tabbed and indexed and shall thereafter contemporaneously deliver to the Presiding Judge three (3) copies of each exhibit or pleading subsequently filed in this or any related proceeding consecutively numbered tabbed and indexed to the extent any revisions are allowed thereto during the hearing, it shall be the responsibility of the sponsoring party to deliver to the Presiding Judge three (3) copes and opposing counsel with revised copies within twenty (24) hours of the revision, along with a separate description of those revisions.

By: Richard Goodwin

Served March 18, 2005

Notice of Pre-Hearing Conference

Notice is hereby given the Pre‑Hearing Conference in the above‑captioned matter shall commence on March 24, 2005, at 9:30 A.M. E.S.T., in Room 5332, U.S. Department of Transportation, Nassif Building, 400 Seventh Street, S.W., Washington, D.C. 20590. The Pre‑Hearing Conference is scheduled for one (1) day, but may continue on Friday, March 25, 2005, if necessary.

The agenda shall include, but is not limited to: the prospects of settlement, the Instituting Order,' Pre‑Hearing Procedural Order, Hearing Procedural Order, Scheduling Order (including Pre‑Hearing and Post‑Hearing schedules), and Ground Rules.

By: Richard Goodwin

Served March 18, 2005

Scheduling Order

Pre-Hearing Schedule

March 23, 2005 - Delivery to the Office of Hearings and parties of the Designation of witnesses, testimony and exhibits
March 24, 2005 - Pre-Hearing Conference
April 1, 4 to 8, 2005 - Hearing on the Merits

Post Hearing Schedule

April 12, 2005 - Post Hearing Briefs due
April 14, 2005 - Post Hearing Reply Briefs due
May 13, 2005 - Recommended Deceision

By: Richard Goodwin

March 21, 2005

Notice of Representation for SAS and Air France

Counsel: Silverberg Goldman, Michael Goldman, 202-944-3305, mgoldman@sgbdc.com

March 21, 2005

Notice of Representation for Complainants

Counsel: Preston Gates, James Weiss, 202-628-1700, jimwe@prestongates.com

OST-2005-20407

March 22, 2005

Joint Complainants' Motion for Leave to File Unauthorized Documents

Respectfully request that the presiding Administrative Law Judge permit Complainants to take the deposition of David Kagan or other document custodian of Respondent, and modify Attachment 1 to the Instituting Order to add additional categories of documents and information to be produced, to the extent that the additional information and documents are not already required to be produced by Attachment 1.

March 23, 2005

Joint Complainants' Motion for Leave to File Unauthorized Documents

Good cause exists to file these documents. Before the ALJ are a motion to obtain documents and information within the scope of, but not explicitly referenced in, the production required by Attachment 1 of the Instituting Order 3 and to take the deposition of a document custodian for the Port Authority who can explain the documents, quite likely David Kagan, the General Manager, Aviation Financial Services, for the Port Authority. The reasons for the requests are set forth in detail within the Brief in Support of the motion. As the Brief explains, good cause exists to grant the Motion

Counsel: Preston Gates, James Weiss, 202-628-1700

March 23, 2005

Notice of Representation

This notifies Respondents in the above‑captioned matter, as well as all entities identified in the attached Certificate of Service, Garofalo Goerlich Hainbach PC, Paul C. Jasinski, and James B. Blaney, in addition to Preston Gates Ellis & Rouvelas Meeds LLP, represent British Airways. Also, Garofalo Goerlich Hainbach PC, in addition to Preston Gates Ellis & Rouvelas Meeds LLP, represents Swiss International Air Lines

Counsel: Garofalo Goerlich, Don Hainbach, 202-776-3976

OST-2005-20407

March 23, 2005

Joint Complainants' Settlement Report

Counsel: Preston Gates, James Weiss, 202-628-1700

March 23, 2005

Security Notice

By: Richard Goodwin

Filed March 23, 2005

Respondent's Opposition to the Airlines' Motion to Modify Attachment 1 to the Instituting Order and Motion for Deposition

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholar.com

Filed March 23, 2005

Respondent's List of Witnesses

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholar.com

Filed March 23, 2005

Respondent's List of Direct Testimony

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholar.com

Filed March 23, 2005

Respondent's Exhibit List

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholar.com

Filed March 23, 2005

Respondent's Settlement Report

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholar.com

March 26, 2005

Airports Council International-North America's Opposition to the Complainants' Motion to Name Additional Witnesses and to Submit Additional Testimony | Word

Counsel: Palmer & Dodge, Arthur Berg, 212-659-7722, aberg@palmerdodge.com

March 26, 2005

Airports Council International-North America's Certificate of Service | Word

Counsel: Palmer & Dodge, Kara Krolikowski

March 28, 2005

Complainants' Motion to File Unauthorized Documents, Complainants' Motion for Reconsideration, or in the Alternative, Interlocutory Appeal to the Decision maker and Proposed Orders

Counsel: Preston Gates, James Weiss, 202-628-1700

March 25, 2005

Joint Complainants' Motion to Introduce Testimony Pursuant to the Instituting Order

Joint Complainants hereby request leave to introduce testimony on March 30, 2005 based on the new data and documentation unjustifiably denied them by the Port Authority of New York and New Jersey until March 23, 2005. The filing of such testimony was clearly contemplated, and indeed expressly authorized, by the Instituting Order in the instant proceeding. In ordering the Port Authority "to provide additional information on its fee methodologies," the Deputy Assistant Secretary established that "Complainants may submit testimony based on the new information at the hearing." As such, there can be no dispute that Joint Complainants are entitled to introduce testimony based on the new data produced by the Port Authority in response to the specific Evidence Requests enumerated in the Instituting Order.

Counsel: Preston Gates, James Weiss, 202-628-1700

March 26, 2005

Respondent's Opposition to Complainants' Motion to Introduce Testimony

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

March 28, 2005

Respondent's Expedited Motion for Telephonic Hearing

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

Served March 25, 2005

Order Granting and Denying Motion to File Unauthorized Documents and Motion to Modify Attachment 1 to the Instituting Order and Depositions

By: Richard Goodwin

March 28, 2005

Brief in Support of Respondent's Motions to Strike Complainants' Declarations of Brennan, Rieser & Kaplan and Exhibit D

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

March 28, 2005

Complainants' Brief in Support of Exhibit D and the Reply Declarations of James P. Brennan, Daniel P. Kaplan, and R. Bruce Rieser

Counsel: Preston Gates, James Weiss, 202-628-1700

Filed March 28, 2005

Complainants' Settlement Report

Counsel: Preston Gates, James Weiss, 202-628-1700

Served March 27, 2005

Order Pursuant to Complainants' Motion to Introduce Witness Testimony

By: Richard Goodwin

March 24, 2005

Pre-Hearing Transcript

By: Neal Gross, Court Reporters and Transcribers

March 28, 2005

Respondent's Second Settlement Report

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

March 28, 2005

Respondent's Opposition to Complainants' Motion for Reconsideration or, in the Alternative, Interlocutory Appeal to the Decisionmaker

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

March 30, 2005

Re: Cover Letter for Direct Testimony of Complainants

Counsel: Preston Gates, James Weiss, 202-661-6225, jimwe@prestongates.com

March 30, 2005

Complainants Designation of Hearing Exhibits

Counsel: Preston Gates, James Weiss, 202-661-6225, jimwe@prestongates.com

March 30, 2005

Respondent's First Revised Exhibit List

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

March 30, 2005

Respondent's Exhibits PA-35 - PA-42 - Bookmarked

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

March 31, 2005

Respondent's (1) Motion to Strike Portions of the "Direct Testimony" of James P. Brennan, R. Bruce Rieser and Daniel P. Kaplan and (2) Emergency Motion for Telephone Hearing

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

March 31, 2005

Re: Respondent's Letter Requesting Immediate Telephonic Conference Call

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

Served March 30, 2005

Order of Administrative Law Judge Correcting Transcript of Hearing

By: Richard Goodwin

Served March 30, 2005

Notice of Change in Hearing Date

Notice is hereby given the Hearing on the Merits will now commence April 4, 2005 at 9:30 a.m. E.S.T. in Room 5332, U.S. Department of Transportation, Nassif Building, 400 Seventh Street, S.W., Washington, D.C. 20590. The Hearing shall continue on April 5, 6, 7 and 8, 2005. Hearings shall commence promptly at 9:30 a.m. and go until approximately 5 p.m. each day.

For guidance, the Presiding Judge typically breaks for fifteen (15) minutes at approximately 10:30 a.m. and 3:30 p.m. Lunch is generally from approximately 12:00 to 1:00 p.m.

By: Richard Goodwin

Served March 28, 2005

Order Pursuant to Complainants' Motion to File Unauthorized Documents and Complainants' Motion for Reconsideration or, in the Alternative, Interlocutory Appeal to the Decision Maker

By: Richard Goodwin

Served March 28, 2005

Order on Evidentiary Matters

By: Richard Goodwin

Served March 25, 2005

Order Granting and Denying Motion to File Unauthorized Documents and Motion to Modify Attachment 1 to the Instituting Order and Dispositions

By: Richard Goodwin

April 1, 2005

Notice of Representation for Complainants

Counsel: Preston Gates, Richard Price, 202-628-1700

April 1, 2005

Complainants' Response to Respondent's Motion to Strike Portions of the "Direct Testimony" of James Brennan, Bruce Rieser, and Daniel Kaplan

Counsel: Preston Gates, James Weiss, 202-628-1700

April 4, 2005

Complainants' Motion to Strike The "Supplemental Declaration" of David Kagan and for Sanctions

Counsel: Preston Gates, James Weiss, 202-628-1700

April 4, 2005

Complainants' Settlement Report

Counsel: Preston Gates, James Weiss, 202-628-1700

April 4, 2005

Supplemental Declaration of David Kagan

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

April 3, 2005

Respondent's Third Settlement Report

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

April 3, 2005

Respondent's Opposition to Complainants' Motion to Strike the Supplemental Declaration of David Kagan and for Sanctions

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

Served April 1, 2005

Second Order on Evidentiary Matters

By: Richard Goodwin

OST-2005-20407

April 4, 2005

Hearing Transcript for April 4, 2005

Served April 5, 2005

Third Order on Evidentiary Matters

By: Richard Goodwin

April 6, 2006

Transcript of Hearing Held April 6, 2005

Served April 7, 2005

Fourth Order on Evidentiary Matters

By: Richard Goodwin

Served April 7, 2005

Post - Hearing Order

By: Richard Goodwin

April 11, 2005

Complainants' Settlement Report

Counsel: Preston Gates, James Weiss, 202-628-1700

April 11, 2005

Respondent's Fourth Settlement Report

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

OST-2005-20407 - Carriers v. Port Authority of NY & NJ/Newark International Airport - Complaint

April 12, 2005

Complainants' Post-Hearing Brief

Respondent has stated that the fee increases are necessary because the passenger fee revenues it receives from International Terminal B, which it has designated as a separate cost center, have failed to cover the costs of that facility since 2002. Respondent has attributed this to a decline in international passengers due to terrorism and the SARS epidemic. In fact, Continental Airlines' shift of its international arrivals from International Terminal B to its own FIS facility at Terminal C-3 was the principal cause of the drop-off in terminal utilization. In allowing Continental to relocate its international traffic to Terminal C, Respondent did not consider the potential impact of the move on the remaining carriers' ability to cover what Respondent claims to be the costs at International Terminal B.9 Moreover, Respondent did not seek to mitigate the lost passenger traffic by directing domestic airlines to share the terminal and the costs.

To the contrary, Respondent simply decided to establish fees that will result in revenues that are significantly in excess of the costs it has claimed for International Terminal B." The evidence demonstrates that these fees are not supported. In addition, the evidence shows that the fees imposed by Respondent are substantially in excess of the imputed FIS and GTC fees incurred by Continental, which competes with the Complainants on most international routes. Since unsupported fees are unjust and unreasonable ‑‑ and substantial, unjustified rate differentials are discriminatory ‑‑ the new fees should be found to be in violation of 49 U.S.C. § 47129 and the DOT's "Policy Regarding Airport Rates and Charges"

Counsel: Preston Gates, James Weiss, 202-628-1700

OST-2005-20407

April 14, 2005

Complainants' Motion for Leave to File Unauthorized Documents - Correct Hearing Transcript

Counsel: Preston Gates, James Weiss, 202-628-1700

April 17, 2005

Intervenor Airports Council International North America's Post-Hearing Brief | Word

Counsel: Palmer & Dodge, Arthur Berg, 212-659-7722, aberg@palmerdoge.com

April 17, 2005

Re: Certificate of Service of Airports Council International - North America | Word

Certificate of the Airports Council International - North America stating that its post-hearing brief has been served by electronic mail.

Counsel: Palmer & Dodge, Kara Krolikowski

April 15, 2005

Complainants' Motion for Leave to File Unauthorized Documents

Counsel: Preston Gates, James Weiss, 202-628-1700

April 17, 2005

Respondent's Post-Hearing Brief

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayscholer.com

April 18, 2005

Complainants' Settlement Report

Counsel: Preston Gates, James Weiss, 202-628-1700

April 18, 2005

Respondent's Fifth Settlement Report

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholder.com

OST-2005-20407

April 20, 2005

Complainants' Reply to Respondent's and Intervenor's Post-Hearing Briefs

Counsel: Preston Gates, James Weiss, 202-628-1700

OST-2005-20407

April 21, 2005

Respondents' Motion for Leave to File an Unauthorized Document - Strike Attachments 1 and 2 to Complainants' Reply to Respondent's and Intervenor's Post-Hearing Briefs and Portions of Complainants' Reply Brief that Reference Attachments 1 and 2

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholder.com

OST-2005-20407

April 25, 2005

Respondent's Sixth Settlement Report

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

May 2, 2005

Respondent's Seventh Settlement Report

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

May 2, 2005

Complaintants' Settlement Report

Counsel: Preston Gates, James Weiss, 202-628-1700

April 22, 2005

Complainants' Opposition to Respondent's Motion to Strike Attachments 1 and 2 to Complainants' Reply to Respondent's and Intervenor's Post-Hearing Briefs

Counsel: Preston Gates, James Weiss, 202-628-1700

OST-2005-20407

May 9, 2005

Respondent's Eighth Settlement Report

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

May 9, 2005

Complainants' Settlement Report

Counsel: Preston Gates, James Weiss, 202-628-1700

May 10, 2005

Admission of Claimants' Exhibits

Counsel: Preston Gates, James Weiss, 202-628-1700

May 10, 2005

Admission of Respondent's Exhibits

Counsel: Kaye Scholer, Steven Rosenthal

Served May 9, 2005

After considering the evidentiary record, briefs, and argument, we have determined that 1) Complainants, except in the instances noted, failed to carry their burden of proof that the Port Authority's increased fees are unreasonable; 2) the increased fees are not unreasonably discriminatory; 3) the Port Authority's application of its fee methodology mistakenly or unreasonably attributed to Complainants certain expenses in the areas of concessions, rent, and expense reclassification; and 4) Complainants are due a refund, plus interest, in an amount in accordance with these findings and conclusions.

By: Richard Goodwin

Served May 9, 2005

Order of Administrative Law Judge Correcting Transcript of Hearing

By: Richard Goodwin

Served May 9, 2005

Order of Administrative Law Judge Correcting Transcript of Hearing

By: Richard Goodwin

OST-2005-20407

Issued May 10, 2005

Notice on Briefing Schedule

Opening briefs to the decision maker - Monday, May 16, 2005

Reply Briefs to the decision maker - Wednesday, May 18, 2005

The Intervenor Aiports Council International – North America may file an opening brief no longer than twenty pages, and a reply brief no longer than ten pages. No further briefing or motions by any of the parties will be accepted. The Department will issue a final decision in this matter no later than June 14, 2005.

By: Michael Reynolds

May 16, 2005

Intervenor's, Airports Council International - North America, Opening Brief to the Department of Transportation Decision Maker

Certificate of Service

Counsel: Palmer & Dodge, Thomas Devine, 202-756-1486

May 16, 2005

Complainants' Brief to the Department Decisionmaker

Counsel: Preston Gates, James Weiss, 202-628-1700

May 16, 2005

Respondent's Opening Brief to the Secretary on Exceptions to the Recommended Decision

For all of the foregoing reasons, the Port Authority respectfully submits that the Secretary should conclude that the Fees Increases are reasonable in all respects and that the Port Authority is entitled to charge an FIS fee of $22.00 per arriving international passengers and a GTC fee of $8.00 per all arriving and departing passengers in Terminal B.

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500, srosenthal@kayescholer.com

May 18, 2005

Complainants' Reply to Brief to the Department Decisionmaker

Counsel: Preston Gates, James Weiss, 202-628-1700

May 18, 2005

Intervenor's, Airports Council International - North America, Reply Brief to the Department of Transportation Decision Maker

Certificate of Service of the Intervenor's Airports Council International-North America

Counsel: Palmer & Dodge, Scott Lewis, 202-293-8500

May 18, 2005

Respondent's Reply Brief to the Secretary on Exceptions to the Recommended Decision

Counsel: Kaye Scholer, Steven Rosenthal

OST-2005-20407

June 2, 2005

Comments of International Air Transport Association | Word

We have noted with real concern language in the ALJ decision that suggests that there is no obligation for an airport to justify rates and costs in relation to the services that are provided to the relative users. This statement is in contradiction to generally accepted policies of the International Civil Aviation Organization and common business practices. IATA therefore urges you not to accept this aspect of the Recommended Decision.

The member airlines of IATA recognize that they are obliged to cover the reasonable costs of the airports they serve. However, they should have full disclosure of the costs that they are covering, without discriminatory charges. ICAO very clearly states that transparency is an essential element of the consultation process. The Department of Transportation Policy Statement on airport rates and charges also requires such transparency.

By: IATA, Douglas Lavin

OST-2005-20407

June 3, 2005

Note Verbale - Comments of The European Community

The European Community and its Member States note that the relevant fee increases are in violation of the obligations common to several bilateral air service agreements between Members States of the Community and the United States. In addition, no meaningful consultation with the European Community and its Member States or airport users took place before the (unreasonably high) fee increases were imposed, no sufficient financial justification for the increases were provided and the fee increases were applied without adhering to the requirements of the Department's Policy Statement Regarding Airport Rates and Charges (issued on June 21, 1996). In this respect, the recorded testimony given to the ALJ by the Newark Port Authority, to the effect that it was aware of the bilaterals but did not consider them relevant, is most pertinent.

By: Council of the European Union

OST-2005-20407

June 7, 2005

Respondents' Motion for Leave to File an Unauthroized Document

Having failed to comply with either of the Department's straightforward procedures for submitting argument or evidence in this proceeding and having failed to comply with the deadlines for submissions to the decisionmaker by actual parties, IATA should not be permitted to submit argument or evidence to the Department with respect to these proceedings. Accordingly, Respondent moves that the Department strike IATA's letter from the docket.

Counsel: Kaye Scholer, Steven Rosenthal, 202-682-3500

Order 2005-6-11
OST-2005-20407

Issued and Served June 14, 2005

Final Decision - Bookmarked

The Department has determined to adopt the results of the ALJ’s Recommended Decision on all of the issues except surplus/net income. In view of the Department's decision that the fees paid by the airlines are reasonable, except for those specific elements deemed unreasonable, the Port Authority must refund complainants the portion of the fees paid during the pendency of this proceeding that is unreasonable. In addition, the Port Authority must adjust its fees in accordance with this order.

As an initial matter, we note that the applicable statute and DOT Policy Statement expressly recognize that an airport has the right to establish a compensatory fee system if it wishes. If an airport chooses a compensatory methodology to set fees, those fees must be based on an airport's costs. In the current case, the Port Authority has characterized their methodology as compensatory; however, we note that in the distribution of concession revenue, the methodology incorporates aspects of a residual methodology. 10 Furthermore, when analyzing the appropriateness of a compensatory non-airfield fee methodology based on cost, the Department finds that it is reasonable to use as guidance the DOT Policy Statement provisions on airfield fees. The Department's view on this point is explained and applied below in our specific analysis of the surplus issue, but applies equally to the other cost issues presented here.

By: Michael Reynolds

OST-2005-20407

June 21, 2005

Respondent's Submission in Supplemental Proceeding

Counsel: Kaye Scholer, Steven Rosenthal

OST-2005-20407

June 27, 2005

Complainants' Response to Respondent's Submission in Supplemental Proceeding

Counsel: Preston Gates, James Weiss, 202-628-1700

OST-2005-20407 - Airport Fee Complaint

June 30, 2005

Respondent's Reply Submission in Supplemental Proceeding / Reply Declaration of David Kagan

Counsel: Kaye Scholder, Steven Rosenthal

Brendan Airways, LLC, et al., v. The Port Authority of New York and New Jersey

Order 2005-7-10
OST-2005-20407 - Airport Fee Complaint

Issued and Served July 12, 2005

Order - Bookmarked | Word

Based on the supplemental information submitted by the Port Authority, the Department has determined that approximately 18.6 percent of the fees paid by the complainants for the period beginning on February 1, 2005, was unreasonable. The statute, 49 U.S.C. § 47129, requires that “any amounts paid … under protest shall be subject to refund or credit … within 30 days”. Rather than order a refund for that amount, the Department has determined that a credit, as proposed by the Port Authority, is an appropriate method to repay the complainants for the fees paid by them under protest.

The Port Authority proposed to issue credits on July 14 to the complainants in the amounts set forth in Respondent’s Reply Submission at 2. It also proposed to issue credits on July 14 for any additional payments made prior to July 6 under the higher fees. For any payments made after July 6, the Port Authority proposed to credit the accounts of the airlines “as soon as practicable.” The Port Authority has already calculated the full amount of the refund, including interest calculated through July 14, due to each airline for payments already received. The Port Authority must refund or credit each airline with these amounts due, no later than the statutory deadline, July 14, 2005.

By: Michael Reynolds