By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
Call it the little airline that could--if someone only would let it.
Legend Airlines basically had its wings clipped before ever taking to the sky. The airline that launched a thousand lawsuits after announcing plans to fly long-haul service out of Love Field has been caught in the acrimonious, costly legal warfare between Fort Worth and Dallas over the federal government's attempts to ease flight restrictions at Love Field.
The legal brawl, which is being duked out in state court in Fort Worth and is giving new meaning to the phrase "home-court advantage," has delayed Legend's efforts to launch its lower-cost, high-service, business-oriented airline by scaring off investors and costing it an unseemly amount in legal bills.
But earlier this week, Legend launched a potentially costly salvo of its own aimed directly at the pocketbook of Fort Worth.
Late Tuesday, Legend filed a complaint with the U.S. Department of Transportation and the Federal Aviation Administration accusing Fort Worth, the DFW Airport Board, and American Airlines--the primary carrier at DFW--of discrimination. The complaint demands that DOT make Fort Worth repay millions of dollars in federal aviation funds it received over the years to build and maintain Alliance and Meacham airports. In addition, Legend asks that DOT deny Fort Worth future airport improvement funds--as the federal agency recently did in a similar case involving an airport in Colorado.
When Legend won a change in federal law last year that would allow it to fly long-haul service from Love Field, Fort Worth and American, supported by the DFW board, sued Dallas in an effort to force the city to restrict flights from Love, threatening to ground Legend.
That lawsuit, before Fort Worth-based state District Judge Bob McCoy, led to a summary judgment in which McCoy essentially ruled that federal law concerning Love Field takes a backseat to the contract between Dallas and Fort Worth that created DFW.
The gist of Legend's complaint with DOT is that McCoy's order, which gave Fort Worth, American, and the DFW Airport Board everything they wanted, forces Dallas to regulate routes and services of Legend, Continental Express, and other air carriers in an arbitrary and discriminatory manner, contrary to federal law. To wit:
* Fort Worth's lawsuit claims the DFW Airport bond ordinance, approved by Dallas and Fort Worth to provide funding for DFW, limits operations at Love Field in order to protect DFW from competition, but the federal courts ruled in the past that it does not.
* The parties to the lawsuit acted in a discriminatory manner by deciding what operations are consistent with the bond ordinance. For example, federal law allows interstate flights from Love Field to the four states adjacent to Texas, though the bond ordinance does not. Fort Worth and the airport board are willing to accept those flights, but not the federal provision that allows aircraft with 56 or fewer seats to fly unrestricted from Love Field. This is the provision under which Continental Express attempted to launch nonstop service from Love Field to Cleveland last spring on its 50-seat regional jets.
* The local parties accept part of the Shelby Amendment, passed by Congress in October 1997, that added interstate flights from Love to Mississippi, Alabama, and Kansas, and they have not challenged Southwest Airline's recent operations to provide through-ticket service to Jackson, Mississippi, and Birmingham, Alabama. But they don't accept the Shelby Amendment provision that would allow Legend to fly unrestricted from Love Field on large jets reconfigured with 56 seats.
"The parties can't pick and choose what parts of federal law they will abide by," says T. Allan McArtor, president and chief operating officer of Legend Airlines. "We don't accept that the Shelby Amendment is OK for Southwest, but not for Legend."
"In my view, the purpose of this complaint is to say to these three parties, enough is enough," says Ed Faberman, a Washington-based attorney for Legend Airlines. "These issues have been debated since Southwest Airlines first announced plans to begin air service from Love Field in 1978, and it has been ruled on and ruled on. But these three parties continue to do anything they can to limit competition. We're saying you can't continue this behavior--behavior you agreed not to engage in when accepting federal funds--and not face penalties."
Dee Kelly, the lawyer representing Fort Worth in its suit against Dallas, did not return phone calls for this story. His secretary, however, said that he had not yet seen a copy of the complaint.
Presently, the complaint asks only that Fort Worth be penalized, but a demand might be included in the future for penalties against DFW Airport as well. The amount of money at stake for Fort Worth is substantial. The federal government gave the city $50 million to build Alliance Airport and continues to provide the city funds each year for both Alliance and Meacham. In 1997, for instance, Alliance received $1 million and Meacham $3.6 million in federal airport improvement funds.
Alliance Airport raises another issue the complaint touches on, says Faberman. "The parties suggest it is OK to limit operations at Love, but it is OK to permit competition and growth at Alliance with little or no explanation. Why is it all right to violate the bond ordinance for one airport and not another?"
Kent Krause, a Dallas-based lawyer and aviation expert, says he thinks Legend's latest move "is a good one--if it works." If DOT rules against Fort Worth, which experts say may take only a matter or months, it may force the whole legal issue into federal court, which is where Legend and the city of Dallas wanted to fight the battle all along.
Faberman says that even if Fort Worth prevails in proving that local rule governs in matters of interstate commerce--which is unlikely, says Krause--Legend's complaint will have that much more fuel. "Dallas would then have the most arbitrary and restrictive ruling in the country limiting operations at an airport not on the issues of noise or safety, but competition," says Faberman. "That itself is arbitrary and inconsistent with the agreement Fort Worth pledged to uphold when taking federal funds."
The complaint also alleges that Fort Worth has sought to destroy Legend to protect American Airlines' relative monopoly at DFW Airport.
In a similar case, DOT recently decided to withhold federal funds from a small airport in Denver after the airport's municipal board refused to allow scheduled passenger flights. For the last several years, a Texas-based entrepreneur had tried to launch passenger service at Centennial Airport in Arapahoe County, which is reserved for charters and private planes. When the airport's ruling body refused to let Centennial Express fly, DOT found that it violated the federal regulation that prohibits discrimination against certain types of air service. That decision, which is on appeal, could cost Centennial Airport $1 million in federal funds this year alone.
The Colorado decision, which came down in late August, gives McArtor hope. Legend's latest move, he says, is one more weapon in his battle to prevent crib death.
"Even Wyatt Earp had a knife and a gun," he says.