Kaplan Kirsch congratulates its client, the City of San Antonio, on the dismissal of Southwest Airlines’ lawsuit challenging the City’s assignment of gates in the planned new terminal complex at San Antonio International Airport. Southwest’s lawsuit arose from the City’s negotiation of a new Airline Use and Lease Agreement, which supported the City’s plan to build a new Terminal C at the Airport. Just before the new Agreement was to take effect, Southwest sued the City, claiming that the City’s decision to assign Southwest gates in existing Terminal A, rather than new Terminal C, was preempted by the Airline Deregulation Act, violated the Equal Protection clause, and was barred by promissory estoppel. In his August 29 decision, Judge Rodriguez dismissed all of Southwest’s claims with prejudice and without leave to amend the complaint. 

With respect to Southwest’s preemption claim, Judge Rodriguez held that because the gate assignment was implemented as part of the new Airline Use and Lease Agreement, it was a contractual matter that did not have “force and effect of law,” and thus was not subject to preemption. He also held that the gate assignment decision did not “relate to” airline prices, routes, and services and was exempt from preemption under the Airline Deregulation Act as a reasonable exercise of the City’s proprietary rights and powers.

The decision is one of the most comprehensive judicial discussions of the scope of airport operators’ proprietary rights and powers. Importantly, the decision broadly affirms that airport operators have authority to plan, manage, and operate their terminals, and may consider airlines’ service offerings in exercising that authority. 

Firm partners Eric Pilsk and Steven Osit led the City’s litigation team.  Eric Smith and Sarah Wilbanks led the legal team that negotiated the Airline Use and Lease Agreement and assisted in the litigation.