Southwest Response Filed Sept 22

Case 3:15-cv-02069-K Document 189 Filed 09/22/15
Page 1 of 78 PageID 5047
UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
CITY OF DALLAS,
Plaintiff,
v.
DELTA AIR LINES, INC., SOUTHWEST
AIRLINES CO., VIRGIN AMERICA INC.,
AMERICAN AIRLINES, INC., UNITED
AIRLINES, INC., SEAPORT AIRLINES,
INC., UNITED STATES DEPARTMENT OF
TRANSPORTATION, and THE FEDERAL
AVIATION ADMINISTRATION,
Defendants.
Civil Action No. 3:15-cv-02069-K
DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED

COUNTERCLAIM AND CROSSCLAIM AGAINST SOUTHWEST AIRLINES AND
CROSSCLAIM AGAINST UNITED AIRLINES, INC.
Defendant Southwest Airlines Co. (Southwest) hereby files this Answer to Delta Air
Lines, Inc.s (Deltas) Amended Counterclaim and Crossclaim (Deltas Amended
Crossclaims) against Southwest.
ANSWER TO DELTAS AMENDED COUNTER- AND CROSSCLAIMS
AGAINST SOUTHWEST
Any allegation not expressly admitted is denied.
DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED COUNTERCLAIMS

AND CROSS CLAIMS AGAINST SOUTHWEST AIRLINES, CO.
PAGE 1
ANSWER TO INTRODUCTION1
1.
In 2006, Southwest and the City of Dallas agreed that Southwest would have 16
gates at the newly renovated Love Field, a facility that belongs to the City and its citizens who
deserve competition at Love Field. In the agreement leasing those gates to Southwest, Southwest
and the City agreed that Southwest would accommodate competing airlines requests for space at
those 16 gates if Southwests operating schedule had room for the requested competition on the
date that the request was made. That agreement is required by federal law, which requires that
airports support free competition rather than favoring one airline over others. As Mayor Mike
Rawlings explained just last year, competition at [Love Field] is good and a growth driver for
this City, and the Citys goal should be to continue to drive competition and take all this
competition and get people flying all over the nation.
RESPONSE:
Southwest denies Deltas contention that the relevant focus for
competition in the Dallas-Fort Worth market is competition at individual airports, as

opposed to competition as a whole. Southwest lacks knowledge or information sufficient to
admit or deny the last sentence of paragraph 1. Southwest denies the remaining allegations
of paragraph 1.
2.
Southwest, too, publicly professes to value competition. In the August copy of
Southwest magazine, placed in every seat of its planes, Southwests CEO Gary Kelly represents
that Im a true believer that competition also makes us better . . . and that Southwest
embrace[s] competition and competes in every aspect of the Customer Experience.
He
Delta incorporated by reference into its Amended Crossclaims against Southwest each and every allegation in its
Amended Counterclaim against the City. While Delta claimed this incorporation furthered concision, such broad
and unspecific incorporation actually invites unnecessary duplication of efforts, including requiring Southwest to
respond to multiple Parties and Introduction sections and to causes of action that are not alleged against
Southwest. Nevertheless, out of an abundance of caution, Southwest responds to each allegation in Deltas
Amended Counterclaim against the City.
PAGE 2
states that competition over fares is not the only competitive factor and that Southwest
compete[s] with our schedule, our products, and our reliability. Yet when the City of Dallas
dared introduce competition by suggesting that Delta must be accommodated at Love Fieldas
required by federal law and the leases covering the Love Field gatesMr. Kelly angrily emailed
City Manager A.C. Gonzalez that the City was reward[ing] competitors that have contributed
nothing to Dallas. Citing billions of dollars in value that Southwest seeks credit for bringing to
Dallas and millions of dollars of tax revenues paid, he threatened, as Southwest so often has
done, to pull out of Dallas if the City did not help Southwest suppress competition, telling the
City that if it did not give in to Southwests attempts to block Delta, Southwest would punish the
City and its tax-paying citizens by moving on to focus our corporate investments in those
markets that place a value on them and their corporate residents. His message was clearstand
down and allow us to block competition or we will make you pay, dearly.
RESPONSE:
Southwest denies Deltas contention that the relevant focus for
competition in the Dallas-Fort Worth market is competition at individual airports, as

opposed to competition as a whole. Southwest admits that it values competition in the
Dallas-Fort Worth market. Southwest admits that the language quoted in sentences 2 and
3 appears in the August copy of Southwest magazine, but defers to the text of its magazine
for the precise wording and context. Southwest admits that the other quoted language
appears in an email from Mr. Kelly to Mr. Gonzalez, but denies the context in which Delta
alleges those quotes arise. Southwest denies the remaining allegations of paragraph 2.
3.
Southwests actions match its private belief that Love Field is its own property,
rather than its public professions that it supports competition. Even though Southwests lease
and federal law required Southwest and the City to allow competition at Love Field, Southwest

PAGE 3
wanted to maximize the huge profits that flow from eliminating competitors at Love Field. In
order to maximize its profits, Southwest needed more than the 16 gates to which it is limited. As
a result, Southwest bullied and threatened the City into allowing Southwest even greater
dominance at Love Field, causing harm to Dallas flyers.
RESPONSE: Southwest denies the allegations in paragraph 3.
4.
Southwest has firsthand experience with the benefits of controlling the vast
majority of gates at a public airport. In addition to the 16 of 20 gates Southwest was supposed to
have at Love Field, Southwest has a dominant presence at Houston Hobby and Chicago
Midwaywhich, like Love Field, are supposed to be public facilities, operated for the benefit of
citizens. At those three airports, including Love Field, Southwest has approximately 90% of the
flights, making competition virtually impossible and driving down the quality of services, while
the fares have increased in recent years more than at almost any other airport in the United States
RESPONSE: Southwest admits that it has a significant presence at Love Field,
Houston Hobby, and Chicago Midway airports.
Southwest denies the remaining
allegations of paragraph 4.
5.
Yet Southwest was not satisfied with its dominance at Love Field. Southwest and
United both had space available when Delta requested accommodation.
But rather than risk
Delta providing even a limited challenge to its stranglehold on the airport, Southwest sought to
expand its own dominance by announcing an intent to begin to use all of the available space
including Uniteds available spaceso that Delta could be kept out. And Southwest used threats
and intimidation to persuade the City to permit this expansion, in violation of its agreement with
the City, entered into by the City for the benefit of its citizens.

PAGE 4
RESPONSE: Southwest denies Deltas implication that Delta has made only one
request for accommodation. Southwest denies the allegations of paragraph 5.
6.
First, Southwest bullied and threatened the City to award Southwest the two gates
that American had to give up as a result of its merger with US Airways. The City was poised to
grant those two gates to Virgin America, at the request of the U.S. Department of Justice, yet
Southwest pushed hard for the City to defy the Department of Justice and instead award the gates
to Southwest. Southwest did that despite the fact that its agreement with the City limited
Southwest to 16 of the 20 gates. Not satisfied with this lions share of the gates, Southwest bore
down on the City to force it to award those two American gates to Southwest.
RESPONSE: Southwest admits that it demonstrated to the City that awarding the
American gates to Southwest would provide the greatest benefit to the Dallas flying public,
just as the Citys own independent consultant had determined. Southwest denies the
remaining allegations of paragraph 6.
7.
The City would have buckled to the coercive conduct of Southwest had it not
been for the Department of Justice, which said, in correspondence to the City, that because
Southwest already controls 16 of the 20 Love Field gates, if it obtained the two American
gates, it would then dominate 90% of Love Field gates, thereby denying consumers the benefits
of meaningful competition at this facilities-constrained airport. The Department of Justice
action empowered the City to refuse to permit Southwest to expand beyond 16 gates by means of
subleasing Americans gates.
With the benefit of a federal government declaration that
Southwest could not have 18 gates, the City approved Virgin Americas agreement to take the 2
gates.

PAGE 5
RESPONSE: Southwest lacks knowledge or information sufficient to admit or deny

the first sentence of paragraph 7. Southwest admits that the City consented to Americans
sublease of its Love Field gates to Virgin. Southwest denies the remaining allegations of
paragraph 7.
8.
During the Citys evaluation of the American gates, Southwest assured the City it
was not working to obtain access to the remaining two gates, leased by the City to United. Yet
as soon as Southwest failed in its attempt to make the American gates its 17th and 18th gates, it
set about to instead make the United gates its 17th and 18th gates. The United gates had
ample availability to accommodate Deltas flights. But United knew it would make far more
money from subleasing those gates to Southwestwhich could use them to solidify its
monopoly over the airportthan it would from either it or Delta flying competitively.
RESPONSE: Southwest denies the allegations of paragraph 8.
9.
Accordingly, United sought and obtained an obscene sum from Southwest for
helping Southwest prevent Delta from competing with it. The grotesque amount Southwest paid
United for these two gates proves the value of obtaining a monopoly at Love Field. Southwests
payment to United also quantifies just how much consumers are being gouged by Southwests
monopoly.
RESPONSE: Southwest admits that it entered into a sublease with United for its
Love Field gates. Southwest denies the remaining allegations of paragraph 9.
10.
There was one potential roadblock in Southwests plan: the City had to approve
the sublease of Uniteds gates. Southwest knew that the DOT had told the City that it did not
want Southwest to obtain Uniteds gates but rather wanted a permanent arrangement to be made
for Delta to have space at Love Field. And because Southwest obtaining Uniteds gates would

PAGE 6
make it almost impossible for other airlines to compete, Southwest and United knew that
completing the sublease would cause both Southwest and United to be in violation of their
agreement with the City, and indirectly with the citizens of the Dallas. United protected itself in
its agreement with Southwest, making Southwest agree that if they were caught, and the City
ordered that Delta or any other airline had to be accommodated at Love Field, Southwest would
use other premises that [Southwest] leases or otherwise subleases at the Airport to
accommodate such airlines, not the gates Southwest had secured from United at far above
market value.
RESPONSE: Southwest admits that the Lease requires the City to consent to any
Love Field sublease and that the City may not unreasonably withhold such consent.
Southwest denies the remaining allegations of paragraph 10.
11.
The City, however, was unable to stand up to Southwests pressure. Without the
protection of a federal government declaration that Southwest could not have what it wanted, the
City feared litigation or lost tax revenue from Southwest if it did not give in. Thus, immediately
on the heels of the DOJ telling Southwest and the City that it would destroy all meaningful
competition for Southwest to acquire more than 16 gates, Southwest and United coerced the
City into approving Southwests acquisition of the 2 gates leased by United, giving Southwest 18
gates, for a purchase price that shocks the conscience.
RESPONSE: Southwest admits that the City consented to the Southwest-United
sublease. Southwest denies the remaining allegations of paragraph 11.
12.
The Federal Aviation Administration (FAA) has now launched an investigation
to decide whether the City violated requirements of federal law when it failed to require that
Delta be accommodated at Love Field, and when it approved this monopoly-creating transfer of

PAGE 7
two gates from United to Southwest. Southwest, for its part, has acknowledged that it was taking
a legal risk in subleasing those United gates and coercing the City to approve the transfer, a risk
that it was willing to take because of the huge monopoly rewards it would gain by surpassing its
16-gate contractual limita benefit it is well aware of based on its monopoly positions at Hobby
and Midway airports.
RESPONSE: Southwest admits that the FAA issued a notice of investigation in
connection with Deltas request for accommodation, but denies that the FAA has
determined that any violation of federal law has occurred. Southwest denies the remaining
13.
Although there is no question that Southwests scheme to unlawfully expand its
dominance over Love Field breached its agreement with the City, the Citys inability to stand
firm under Southwests pressure is a breach of its own contractual duties. That causes harm that
is not limited to competitors, like Delta, who Southwest seeks to push out of the public airport
that Southwest wrongly considers its own property. The more serious harm is to Dallas citizens,
who have a right to the benefits that competition will bring to Love Field, and have been denied
it by Southwests bullying and the Citys acquiescence.
14.
Delta therefore asks this Court to play the role that the DOJ was forced to play
when Southwest pressured the City to give it Americans gates. That is, Delta respectfully
requests that the Court declare that, under the agreements that the City and Southwest signed, the
City is duty-bound under law to force Southwest to accommodate Deltas operations at Love
Field. Delta further asks this Court to undo the wrong that Southwest and United did through the
competition-crushing sublease by declaring that Southwest may control no more than 16 gates,

PAGE 8
and that its 17th and 18th gates must be given back to the City for the common use of
competitors. Delta respectfully asks the Court to declare that Delta will then have the right to fly
the flights it has requested space for from those common use gates.
In the alternative, if
Southwest is permitted to keep 18 leased or subleased gates, Delta asks this Court for a
declaration that it is entitled to accommodation on reasonable terms for its existing schedule,
plus the additional 8 flights it requested in February, on those 18 gates.
RESPONSE: Southwest admits that Delta seeks the relief it requests, but denies that
Delta is entitled to any relief. Southwest denies the remaining allegations of paragraph 14.
ANSWER TO PARTIES
15.
Counter-Plaintiff Delta Air Lines, Inc. is a Delaware corporation whose principal
place of business is located at 1030 Delta Boulevard, Atlanta, Georgia 30354. Delta is an air
carrier engaged in the business of providing commercial passenger air transportation throughout
the United States and the world. Delta is a citizen of the States of Delaware and Georgia.
RESPONSE: Southwest admits the allegations in Paragraph 15.
16.
Counter-Defendant City of Dallas is a municipal corporation located in Dallas
County, Texas. The City is the owner and operator of Love Field. The City is a citizen of the
State of Texas and does not operate as an arm of the State of Texas.
RESPONSE: Southwest lacks knowledge or information sufficient to form a belief
as to whether the City operates as an arm of the State of Texas. Southwest admits the
remaining allegations in Paragraph 16.

PAGE 9
ANSWER TO JURISDICTION AND VENUE

17.
This Court has jurisdiction under 28 U.S.C. 1331 because this action arises
under the laws of the United States.

RESPONSE: Southwest admits the allegations contained in Paragraph 17.
18.
This Court has jurisdiction under 28 U.S.C. 1332(a)(1) because the matter in
controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between
citizens of different States.
19.
To the extent this Court does not have original jurisdiction of any counterclaim(s)
asserted in this action, this Court has jurisdiction under 28 U.S.C. 1367 because the Court has
original jurisdiction of the action and all of the counterclaims asserted herein are so related to
one another that they form part of the same case or controversy under Article III of the United
States Constitution.
20.
To the extent that the City would otherwise be entitled to government immunity
from suit in this Court, the City waived that immunity when it initiated this action. The Citys
waiver extends to Deltas counterclaims because those counterclaims arise out of the same
transaction or occurrence that is the subject matter of the Citys complaint.
RESPONSE: Southwest admits the allegations contained in paragraph 20.
21.
Venue in this Court is proper under 28 U.S.C. 1391(b)(2) because a substantial
part of the events and omissions giving rise to Deltas counterclaims occurred in this judicial
district.

PAGE 10
ANSWER TO BACKGROUND AND FACTS

I.
Federal Regulation of Federally Funded Airports

22.
DOT and its operating administration, the FAA, exercise plenary and preemptive
authority over federally funded airports (such as Dallas Love Field).
To receive funding
under the federal funding program known as the Airport Improvement Program (AIP), an
airport sponsor (such as the City) must agree to comply with statutory and contractual
obligations relating to the operation and use of the airport. The purpose of these statutory
obligations and grant assurances is to foster full and fair competition in air transportation.
RESPONSE: Southwest admits that DOT and the FAA exercise a certain degree of
authority over federally funded airports like Love Field, admits that airport sponsors must
comply with certain statutory and contractual obligations relating to the operation and use
of the airport to receive federal funding under AIP, and admits that the assurances
require the recipients to maintain and operate their facilities safely and efficiently and in
accordance
with
specified
conditions.
(see
http://www.faa.gov/airports/aip/grant_assurances/), but remarks that the application of the

grant assurances to Love Field is limited by the obligations specified in WARA. Southwest
denies the remaining allegations in Paragraph 22.
23.
Love Field has received federal funding under AIP. In fact, over the past five
years alone, Love Field has received over $20 million from the federal government for airport
improvements. In addition, Love Field has received federal approval to impose and use a $4.50
passenger facility fee. As a result, the City is subject to more than a dozen contractual
obligations known as grant assurances regarding the operation and use of Love Field. The
grant assurances are binding obligations between the City and the federal government.

PAGE 11
RESPONSE: Southwest admits that Love Field has received federal funding under
AIP, but remarks that WARA modifies the grant assurances, as applicable to Love Field,
by, among other things, precluding the City from constructing additional gates or
modifying or eliminating preferential lease rights, unless such modification or elimination
is implemented on a nationwide basis.
Southwest lacks knowledge or information
sufficient to form a belief as to the remaining allegations of Paragraph 23.

24.
Grant assurance 22a, which implements 49 U.S.C. 47107(a)(1), requires the
City to make Love Field available as an airport for public use on reasonable terms and without
unjust discrimination to all types, kinds and classes of aeronautical activities, including
commercial aeronautical activities offering services to the public at the airport. The City owes
this obligation to all air carriers and users of Love Field, regardless of whether the air carrier or
user is a tenant, subtenant, or non-tenant. This obligation bars the City from denying an air
carrier access to Love Field solely based on the non-availability of existing facilities.
RESPONSE: Southwest admits the allegations in the first sentence of Paragraph 14,
but remarks that WARA modifies the grant assurances, as applicable to Love Field, by,
among other things, precluding the City from constructing additional gates or modifying or
eliminating preferential lease rights, unless such modification or elimination is
implemented on a nationwide basis. Southwest denies the remaining allegations of
Paragraph 24.
25.
Grant assurance 23, which implements 49 U.S.C. 40103(e), prohibits the City
from directly or indirectly granting any carrier an exclusive right to use Love Field.
An
exclusive right is not limited to a right that is held exclusively by a single carrier, but any right
that a carrier has while one or more other carriers are denied that right. Under this prohibition,

PAGE 12
the City may not: claim lack of gate availability when, in fact, gates are not fully utilized;
relinquish control of airport facilities to incumbent carriers for purposes of negotiating access
with a new entrant; or permit unreasonable sublease fees or conditions to be imposed on new
entrants.
Any of these actions would favor the incumbent carrier over carriers without
permanent lease rights at the airport. At Love Field, a new entrant includes any carrier that is
not a signatory carrier at Love Field. Thus, the term includes limited incumbent carriers such as
Delta who may have a small presence at the airport but are not Lease signatories.
RESPONSE:
Southwest admits that grant assurance 23 provides that airport
sponsors will not permit an exclusive right for the use of the airport by any person, but
remarks that WARA modifies the grant assurances, as applicable to Love Field, by, among
other things, precluding the City from constructing additional gates or modifying or
implemented on a nationwide basis.
Southwest denies the remaining allegations of
paragraph 25.
26.
PFC Assurances prohibit PFC-funded facilities, like the terminal at Love Field,
from being leased on an exclusive use basis, whether the exclusivity arises out of an exclusive
use lease or on a de facto basis when the lease is interpreted to effectively grant an exclusive
lease to a signatory carrier to the exclusion of a new entrant.
RESPONSE: Southwest admits that an operator of a PFC-funded airport may not
enter into an exclusive long-term lease or use agreement with an air carrier or foreign air
carrier for projects funded by PFC revenue.
FAA PFC Assurances (2007), Item 5.
Southwest notes that no Love Field carrier has an exclusive long-term lease or use
agreement with the City to operate at Love Field. Southwest further remarks that WARA

PAGE 13
modifies federal obligations, as applicable to Love Field, by, among other things,
precluding the City from constructing additional gates or modifying or eliminating
preferential lease rights, unless such modification or elimination is implemented on a
nationwide basis. Southwest denies the remaining allegations of paragraph 26.
II.
The Citys Competition Plan for Love Field

27.
As a recipient of federal funding under AIP, and as a Passenger Facility Charge
sponsor, the City is required under federal law to submit an acceptable competition plan to the
Secretary of Transportation.
The FAA consistently has interpreted the competition plan
requirements as focusing on individual airportsnot airport systems or metropolitan areas

when assessing availability of gates for new entrants.
And Love Field itselfnot the
Dallas/Fort Worth Metropolitan Areais subject to its own requirement to submit and make
commitments in its airport competition plan.
RESPONSE: Southwest admits the allegations in the first sentence of paragraph 27,
denies the allegations in the second sentence of paragraph 27, and denies the allegation in
the third sentence of paragraph 27 as they fail to track the language of 49 U.S.C. 40117(k)
and 47106(f). Southwest denies the remaining allegations of paragraph 27.
28.
A competition plan must include, among other things, a discussion of the
accommodation of new service and of service by a new entrant. Accommodation is the

process by which an airline that already operates regularly scheduled flights at an airport is
required by the airport owner, operator, or sponsor to provide a portion of its space at the
airportincluding gate and related support spaceto an airline that seeks to begin service or
expand its current service at the airport.

PAGE 14
RESPONSE: Southwest admits the allegations in the first sentence of paragraph 28,
but remarks that they fail to specifically track the language of 49 U.S.C. 40117(k) and
47106(f) and do not appear to directly quote any FAA regulation. Southwest denies the
29.
In its competition plans, the City has repeatedly acknowledged that when new
entrant airlines wish to begin providing service at Love Field, the City is obligated to force
accommodation if necessary in order to promote competition. The City filed its initial Love
Field Competition Plan (the Competition Plan) on July 31, 2001.
In its plan, the City
recognize[d] that, by having accepted Federal grants, it has undertaken a legal obligation to
provide reasonable air carrier access at Love Field. The City further recognized that its leases
with incumbent carriers include gate-sharing provisions . . . requiring accommodation of other
airlines within the lease premises of the incumbent airlines.
RESPONSE: Southwest denies the allegations contained in the first sentence of
paragraph 29. As to the remaining allegations of paragraph 29, Southwest defers to the
text of the Love Field Competition Plan for its precise wording, and denies the wording
used by Delta that is inconsistent with the precise wording and positioning of the wording
in the document. Southwest denies the remaining allegations of paragraph 29.
30.
In an update to its Competition Plan filed in February 2005, the City once again
acknowledged its obligation to make all reasonable efforts to accommodate carriers seeking to
provide service at Love Field, reiterated its willingness to enforce the gate sharing provisions
of the leases to make space available to potential new entrants, and stated that it continue[s] to
be committed to ensuring that any carrier seeking to provide service to Love Field receives
reasonable access to needed facilities.

PAGE 15
RESPONSE: Southwest defers to the text of the Competition Plan for its precise
wording. Southwest denies the remaining allegations in paragraph 30, and denies the
wording used by Delta that is inconsistent with the precise wording and positioning of the
wording in the document.
31.
The City filed another update to its Competition Plan in June 2009, and in that
update the City specifically acknowledged its obligation to force accommodation of Delta at
Love Field. The City reaffirmed its general commitment to accommodating new entrants and
explained that [i]n the future, the City intends to accommodate requests for access by applying
the gate sharing provisions contained in the current leaseprovisions which have been
incorporated in Section 4.06F of the new Restated Lease.
RESPONSE: Southwest denies that the City acknowledged an obligation to force
accommodation of Delta. As to the remaining allegations in paragraph 31, Southwest
defers to the text of the 2009 Competition Plan for its precise wording, and denies the
wording used by Delta that is inconsistent with the precise wording and positioning of the
wording in the document.
32.
At the time of the 2009 update, Delta had informed the City of its intent to
provide service at Love Field, and the Citys update included a specific plan to accommodate
Delta. The City represented that [o]nce the terminal redevelopment is completed, the City will
accommodate Delta based on the gate sharing provisions of the preferential use lease.
as to when Delta had informed the City of its intent to provide service at Love Field.
Southwest denies the remaining allegations in the first sentence of paragraph 32. As to the
remaining allegations in paragraph 32, Southwest defers to the text of the Citys letter for

PAGE 16
its precise wording, but denies that such language provides any guarantee to Delta for
accommodation; to the contrary, the City promised only to apply the gate sharing
provisions of the preferential use lease, which, among other things, (1) only apply to new
entrants, which Delta is not, and (2) do not require accommodation when doing so would
interfere with a signatory carriers schedule. Southwest denies the remaining allegations of
paragraph 32.
III.
The Airport Use and Lease Agreements

33.
The lease agreements referenced in the Competition Plan and its updates are the
Airport Use and Lease Agreements the City has entered into with three carriersSouthwest,
American, and United Airlines (collectively, the Lease Agreements). The Lease Agreement
between the City and Southwest spells out the details and logistics of the Citys obligation to
force accommodation at Love Field.
RESPONSE: Southwest admits the allegations in the first sentence of paragraph 33.
Southwest admits that the Lease Agreement between the City and Southwest contains a
process for the possible accommodation of a new entrant airline subject to the operations of
the lease-holding airline on its own leased space.

34.
Under 4.06(D)(4) of the Lease Agreement, if a new entrant carrier seeks to
begin service at Love Field, the City is obligated to seek voluntary accommodation from its
existing airline lessees to accommodate the new entrant service, and [i]f the existing carriers
are not able or are not willing to accommodate the new entrant service, then the City agrees to
require the sharing of the incumbent airlines leased gates.

PAGE 17
RESPONSE: Southwest denies that Delta has presented a full and complete
representation of that section 4.06(D)(4) of the Lease, and defers to the text of the Lease for
its precise wording. Southwest denies that Delta is a new entrant carrier, and, thus,
denies that section 4.06(D)(4) applies to Deltas request for accommodation. Southwest
further remarks that the City is obligated, pursuant to the Lease and other obligations, to
manage Love Field responsibly and safely. Any request for accommodation is subject to a
number of considerations, including the foregoing.

35.
Section 14.09 of the Lease Agreement expressly incorporates the airport grant
assurances into the Lease Agreement and makes the Lease subordinate to those grant assurances.
The Lease Agreement requires both Southwest (in Section 14.03(B)) and the City (in Section
14.19) to operate at the airport in a manner consistent with the grant assurances.
RESPONSE: Southwest denies the allegations contained in Paragraph 35 because
they do not accurately quote section 14.09 of the Lease. Southwest defers to the text of the
Lease for its precise wording.
36.
Section 4.06(F) of the Lease Agreement contains a scarce-resource provision
that acknowledges that Love Fields facilities may become a scarce resource if a new entrant
airline (Requesting Airline) requests to provide service at the Airport and lays out a four-step
process through which a potential new entrant carrier may seek accommodation at Love Field:
A.
The requesting airline must seek voluntary accommodation by attempting to

secure gate space and other necessary facilities on a voluntary basis from one of
the incumbent airlines at Love Field. ( 4.06(F))
B.
If the requesting airline has contacted all of the incumbent airlines and exhausted
all reasonable efforts to secure voluntary accommodation, the requesting airline
may notify the Citys Director of Aviation, who in turn must notify all Signatory
Airlines in writing that if Requesting Airline is not accommodated within thirty

PAGE 18
(30) days from the receipt of notice, the Director will select one of the Signatory
Airlines to comply with the request for accommodation in a non-discriminatory
manner. ( 4.06(F)(2))
C.
At the end of that 30-day period, if none of the incumbent airlines have agreed to
voluntarily accommodate the requesting airline, the City is obligated to select a
Signatory Airline to accommodate the Requesting Airline and send a written
notice to that Signatory Airline requiring accommodation within 30 days of
receipt of the notice. ( 4.06(F)(3))
D.
At the end of that second 30-day period (in other words, 60 days after the
requesting airline first provides notice to the Citys director of aviation), the
incumbent airline that has been selected for accommodation must accommodate
the requesting airline by sharing a portion of its leased gates and allowing the
requesting airline to operate flights out of that shared gate space. ( 4.06(F)(4))
Thus, under the Lease Agreement, when a new entrant airline makes an exhaustive but
unsuccessful effort to seek voluntary accommodation from incumbent carriers, the City is subject
to a mandatory duty to force accommodation of the new entrant.
RESPONSE: Southwest admits that the Lease contains provisions for the possible
accommodation of a new entrant airline under certain conditions. Southwest denies that
the City is obligated to mandatorily force accommodation of a new entrant. Southwest
denies that section 4.06(F)(3) obligates the City to select a carrier to accommodate the
requesting airline. Southwest denies that Deltas four-step scheme encompasses all of the
rights and obligations of signatory airlines under the Lease in the event of an
accommodation request. Southwest admits that the quoted passages appear in the Lease,
but defers to the text of the Lease for its precise wording. Southwest denies the remaining
allegations in paragraph 36.
37.
By entering into the Lease Agreements, the City waived its governmental
immunity from liability under those Lease Agreements.

PAGE 19
RESPONSE: Southwest admits the allegations of paragraph 37, but denies that
Delta is a proper party to sue under the Lease.
IV.
The Five Party Agreement

38.
In 1979, Congress passed the Wright Amendment, which amended the Federal
Aviation Act to prohibit service by medium and large aircraft (more than 56 seats) between Love
Field and any point outside of Texas and its four surrounding states (Arkansas, New Mexico,
Louisiana, and Oklahoma).
Later amendments to the Wright Amendment added Alabama,
Kansas, Mississippi, and Missouri to the Love Field service area.

RESPONSE: Southwest admits the allegations in paragraph 38.
39.
On July 11, 2006, the Cities of Dallas and Fort Worth, the DFW International
Airport Board, Defendant American Airlines, and Southwest entered into an agreement (the
Five Party Agreement) that, among other things, sought the enactment of legislation that
would amend and ultimately repeal the limitations on Love Field operations imposed by the
Wright Amendment. In exchange for lifting these limitations, the Five Party Agreement called
for the reduction of gate capacity at Love Field, from 32 to 20 gates, which the agreement
specifically allocated among three airlinesSouthwest (16 gates), American (2 gates), and
ExpressJet Airlines, Inc. (2 gates, which were later acquired by Defendant United Airlines). No
other airline (including Delta) was a party to the Five Party Agreement or allocated a gate under
it; instead, airlines without Lease Agreements who wish to serve Love Field may seek to do so as
new entrants.).
RESPONSE: Southwest admits the allegation in paragraph 39.
40.
In the Five Party Agreement, the City agreedand is obligatedto compel
forced accommodation of new entrant carriers at Love Field.
Specifically, the Five Party

PAGE 20
Agreement provides that [t]o the extent a new entrant carrier seeks to enter Love Field, the City
of Dallas will seek voluntary accommodation from its existing carriers to accommodate the new
entrant service. If the existing carriers are not able or are not willing to accommodate the new
entrant service, then the City of Dallas agrees to require the sharing of preferential lease gates,
pursuant to Dallas existing lease arrangements.
RESPONSE: Southwest denies the allegations of the first sentence of paragraph 40.
As to the remaining allegations of paragraph 40, Southwest defers to the text of the Five
Party Agreement for its precise wording, but denies that any language in the Five Party
Agreement provides any guarantee to Delta for accommodation; to the contrary, the Five
Party Agreement requires only the application of the gate sharing provisions of the Lease
which, among other things, (1) only apply to new entrants, which Delta is not, and (2) do
not require accommodation when doing so would interfere with a signatory carriers
schedule. Southwest denies the remaining allegations of paragraph 40.
V.
The Wright Amendment Reform Act of 2006

41.
On October 13, 2006, Congress enacted the Wright Amendment Reform Act of
2006, Pub. L. No. 109-352, 120 Stat. 2011 (2006) (the Reform Act). The Reform Act codified
into federal law many of the most important provisions of the Five Party Agreement. It
permanently capped the number of Love Field gates at 20 and provided for the eventual
elimination of the limitations on nonstop flights at Love Field.
42.
Section 5(a) of the Reform Act requires the City to determine the allocation of
leased gates and manage Love Field in accordance with the provisions of the Lease
Agreements. This includes an express requirement that the City must accommodate new

PAGE 21
entrant air carriers by honor[ing] the scarce resource provisions of the existing Love Field
leases. Section 5(a) thus codifies into federal law the Citys obligation under the Lease
Agreements to force accommodation of new entrants (such as Delta) at Love Field.
RESPONSE: Southwest admits the allegations of the first sentence of paragraph 42.
As to the quoted passages, Southwest defers to the text of WARA for its precise wording.
Southwest denies the remaining allegations in paragraph 42.
43.
Section 5(e) of the Reform Act explicitly reserves to the FAA its jurisdiction to
enforce grant assurance and statutory obligations related to grant assurance compliance and the
prohibition on exclusive rights: Nothing in this Act shall be construed . . . to limit the authority
of the Federal Aviation Administration or any other Federal agency to enforce requirements of
law and grant assurances . . . that impose obligations on Love Field to make its facilities
available on a reasonable and nondiscriminatory basis to air carriers seeking to use such
facilities, or to withhold grants or deny applications to applicants violating such obligations with
respect to Love Field.
RESPONSE: Southwest defers to the text of WARA for its precise wording, but
remarks that WARA modifies the grant assurances, as applicable to Love Field, by, among
other things, precluding the City from constructing additional gates or modifying or
implemented on a nationwide basis.
Southwest denies the remaining allegations in
paragraph 43.
VI.
The Citys Repeated Promises to Accommodate Delta at Love Field

44.
Delta currently offers five daily flights from Love Field to its hub, Atlantas
Hartsfield-Jackson International Airport, from which passengers can connect to Deltas

PAGE 22
worldwide network of flights. Delta has been operating out of Love Field since the summer of
2009, when it subleased a gate from American Airlines. Deltas sublease with American was
extinguished as a result of the 2013 merger between American and US Airways. As a condition
of its approval of the merger, the Department of Justice announced in November 2013 that
American would be required to divest its two gates at Love Field.
RESPONSE: Southwest admits that Delta currently offers five daily flights from
Love Field to its hub in Atlanta, but lacks knowledge or information sufficient to form a
belief as to the remaining allegations in paragraph 44. Southwest admits that Deltas
sublease with American terminated in 2014, but lacks knowledge or information sufficient
to form a belief as to the precise date. Southwest admits the remaining allegations of
paragraph 44.
45.
Both Delta and Southwest sought to obtain the right to use Americans gates.
After the DOJ made it known that it wanted Virgin America to receive the gates, Southwest
nonetheless made a last-ditch effort to persuade the City to defy the DOJ and confer the gates on
Southwest. The DOJ sent a letter to the City in which it reaffirmed its conclusion that the gates
should go to Virgin America and stated the obvious: that Southwest already controls 16 of the
20 Love Field gates, such that [i]f it obtained the two American gates, it would then dominate
90% of Love Field gates, thereby denying consumers the benefits of meaningful competition at
this facilities-constrained airport.
In response to the DOJs reaffirmation of its previous
decision, the City agreed to Virgin Americas entry into Love Field. In May 2014, Defendant
Virgin America announced that the City had approved Virgins request to sublease the two Love
Field gates American was divesting.

PAGE 23
Southwest admits that Southwest, just like Delta, sought to lease Americans two gates at
Love Field, but denies that it made any last-ditch effort to persuade the City to defy the
DOJ. Southwest admits that the DOJ supported divestiture of Americans gates to Virgin
America, but also remarks that the DOJs letter referred to in paragraph 45 stated that the
DOJ considered Delta ineligible to acquire those gates because it is a high-cost legacy
airline that would not provide adequate competition at Love Field. Southwest admits that
the City consented to Virgin Americas sublease of Americans gates at Love Field.
46.
The divestiture of Americans gates caused Deltas sublease at Love Field to
terminate on October 12, 2014. Accordingly, in June 2014, Delta commenced the process of
seeking accommodation pursuant to the provisions of the Lease Agreements and the guarantees
in the Five Party Agreement and the Competition Plans.
the first sentence of paragraph 46. Southwest admits that Delta sought Love Field gate
access in June 2014, but denies the remaining allegations of paragraph 46.
47.
Delta began the four-step accommodation process set out in the scarce-resource
provisions of the Lease Agreements by seeking voluntary accommodation from the incumbent
airlines. In June 2014, Michael Anastas, a Regional Director for Delta, sent letters to United
Airlines, Southwest Airlines, and American Airlines formally seeking voluntary accommodation
of Deltas six scheduled flights at Love Field under 4.06(F) of the Lease Agreements between
the airport and each of these carriers.
Mr. Anastas also notified Mark Duebner, the Citys
Director of Aviation at Love Field, that Delta was beginning the process of seeking voluntary

PAGE 24
accommodation from the three incumbent carriers. On July 16, 2014, Delta provided written
notice to the City that Delta had contacted all three signatory carriers, that none was willing to
voluntarily accommodate Delta at Love Field, and that Delta thus had exhausted all reasonable
efforts to
secure voluntary accommodation.
Delta
also
formally requested forced
accommodation from the City.

RESPONSE: Southwest denies the allegations contained in the first sentence of
paragraph 47. Southwest admits that Delta sought Love Field gate access in June 2014, but
denies the remaining allegations of the second sentence of paragraph 47. Southwest lacks
knowledge or information sufficient to admits or deny the remaining allegations of
paragraph 47.
48.
Under 4.06(F)(2) of the Lease Agreements, Deltas July 16, 2014 formal
accommodation request obligated the City to select a signatory airline for forced accommodation
within the next 30 days (i.e., by August 15, 2014).
49.
Article I.3.b of the Five Party Agreement requires the City to require the sharing
of preferential lease gates, pursuant to Dallas existing lease arrangements, in the event that
existing carriers refuse to accommodate a new entrant.
RESPONSE: Southwest defers to the text of the Five Party Agreement for its
precise wording, but remarks that the Five Party Agreements sharing requirement is
subject to the Lease, which says such sharing of gate space cannot unduly interfere with a
signatorys scheduled use and cannot take precedence over the signatory carriers use.

PAGE 25
50.
Section 5(a) of the Wright Amendment Reform Act requires the City to honor
the scarce resource provisions of the Lease Agreements at Love Field.

RESPONSE: Southwest defers to the text of WARA for its precise wording and also
notes the express limitations on the grant assurances applicability to Love Field imposed
by WARA.
51.
The Competition Plan and its updates require the City to accommodate non-lease-
holding airlines who wish to provide service at Love Field by enforcing the gate-sharing
provisions of the Lease Agreementsspecifically, Section 4.06(F).
52.
Delta expected that the City would live up to its end of the bargain under the
Lease Agreements and under federal law by notifying the three incumbent carriers of the need to
accommodate Delta andif none of them was willing to do so voluntarilyrequiring one of the
three to accommodate Delta under 4.06(F)(2) of the Lease Agreements.
And indeed,
throughout the summer and fall of 2014, the City repeatedly represented to Delta that it intended
to do exactly that:
On June 13, 2014, Mark Duebner (the Citys aviation director) and Michael
Anastas (a Delta regional director) spoke by telephone about Deltas request
and need for accommodation, and Mr. Duebner assured Mr. Anastas that
Duebner would do everything in his authority to make sure the City
accommodated Delta.
In a follow-up phone conversation on June 22, 2014, between Mr.

Duebner and Holden Shannon (a Senior Vice President for Delta), Mr.
Duebner committed to Mr. Shannon that the City would accommodate Deltas
existing schedule.
During August and September, 2014, Delta representatives participated in

meetings with Love Field staff to prepare for Deltas accommodation at one
or more of the gates of the incumbent carriers. One of these meetings
occurred on Thursday, September 11, 2014. At the meeting, the City
represented and committed that it would require United to accommodate

PAGE 26
Delta. Mr. Duebner told Mr. Anastas, I will notify United tomorrow,
Monday at the latest, and tell them they need to accommodate Delta
so you can plan your move.
During a telephone conversation on September 18, 2014, Mr. Duebner

committed to Mr. Shannon that the airport would find a way to accommodate
Deltas existing schedule of five daily flights from Love Field to Atlanta.
On September 19, 2014, Mr. Duebner and Mr. Anastas spoke by telephone,
and Mr. Duebner represented to Mr. Anastas that he had notified United
that it would be required to accommodate Delta.
On September 22, 2014, Mr. Duebner twice committed to Mr. Anastas that
the City would require United to accommodate Delta after Deltas sublease
with American expired on October 12, 2014.

about the allegations in paragraph 52.
53.
Despite the Citys repeated promises that it would accommodate Deltas
expanded operations at Love Field, the City failed to perform its obligation under the Lease
Agreements. On Monday, September 29, 2014, Mr. Duebner sent Delta a letter reneging on the
Citys promise and informing Delta for the first time that the City would not accommodate Delta
at Love Field. In his letter, Mr. Duebner also stated that United and Southwest had entered into a
Gate Use License Agreement under which United would assign its gate space to Southwest
with the Citys consent.
RESPONSE: Southwest denies that the City not accommodating Delta was a failure
of its obligations under the Lease. Southwest lacks knowledge or information sufficient to
form a belief about the remaining allegations in paragraph 53.
54.
The Citys approval of this arrangement was completely unanticipated. During
the divestiture of Americans gates, the DOJ had repeatedly emphasized the Citys obligation to
promote competition at Love Field.
And these concerns about competition are well-founded.

PAGE 27
Between 2004 and 2014, domestic fare prices at Love Field increased by an astounding 86%
more than any other top 100 airport (as ranked by volume of passengers) in the United States.
Even before the Wright Amendment expired, fare prices at Love Field between 2007 and 2012
were experiencing one of the highest increases in the country. Similar fare-price increases
occurred at Houston Hobby and Chicago Midway, which are also Southwest-dominated airports.
Southwest serves over 90% of the passengers at these airports, and has been able to significantly
increase fare prices at each airport despite the presence of another, larger airport within the same
metropolitan area.
Nevertheless, until the introduction of Virgin America in May 2014,
Southwests dominance had grown largely unchecked.

RESPONSE: Southwest admits that Love Fields average fare has increased from
2004 to 2014, but remarks that Deltas allegation ignores the fact that the average
passenger per trip length at Love Field increased substantially over this time, which
naturally accounts for higher fares, and ignores the increased checked baggage fees and
reservation change and cancellation fees charged by other airlines (but not Southwest),
which have the effect of understating fares at other airports as compared to Love Field.
55.
The Citys approval of Virgin Americas entry into Love Field suggested that it
was aware of Southwests threat to healthy competition at the airport. In light of this renewed
commitment to competition, Delta fully anticipated that the City would be more than willing to
further expand the flying publics options at Love Field. Competition would not only constrain
price at Love Field, but would provide additional options to a significant segment of the flying
public that would prefer the superior reliability and service of flying on Delta.
This is
particularly true given that Southwests no frills serviceno assigned or premium seats, no

PAGE 28
first classis no longer accompanied by the fare advantages that Southwest was once reputed to
provide.
RESPONSE: Southwest denies the allegations in the first sentence of paragraph 55.
Southwest lacks knowledge or information sufficient to admit or deny the allegations in the
second sentence of paragraph 55. Southwest denies Deltas contention that the relevant
focus for competition in the Dallas-Fort Worth market is competition at individual
airports, as opposed to competition in the market as a whole.
Southwest denies the

56.
Nevertheless, even though Delta had formally notified the City of its request for
forced accommodation on July 16, 2014, and diligently pursued it thereafter; and even though
Section 4.06(F)(2) of the Lease Agreements required the City to act on that request within thirty
days; the City still had not acted on Deltas request in early October 2014. Ironically, while the
City continued its failure to act on Deltas accommodation request, the City Council voted on
October 8, 2014 to rename the main road leading to Love Field after Southwests co-founder,
Herb Kelleher. With its sublease from American set to expire on October 12, 2014, Delta had no
choice but to enter into a short-term agreement that would allow Delta to continue operating at
Love Field.
Accordingly, on October 10, 2014, Delta entered into a Gate Use License
Agreement with Southwest and a Facilities Use License Agreement with United, the combined
effect of which was to allow Delta to continue operating at Love Field until January 6, 2015.
Delta signed these agreementseven though the economic terms did not comply with DOT
requirements and were less favorable than the terms the City offered Southwestbecause they
were the only way Delta could avoid disruption of its scheduled service, displacement of its
traveling customers, and irreparable harm to its business reputation and good will.

PAGE 29
RESPONSE: Southwest admits that he City had not forced an accommodation of

Delta in October 2014 and that Delta entered into voluntary agreements with United and
Southwest that allowed it to continue running five flights to Atlanta until January 6, 2015.
Southwest admits that the City voted to rename the road leading to Love Field after Herb
Kelleher. Southwest denies the remaining allegations of paragraph 56.
57.
In November 2014, the City notified Delta, Southwest, United, and Virgin that it
intended to develop a Love Field accommodation policy to use on Deltas pending

accommodation request. In connection with that effort, the City retained an aviation-industry
consultant to analyze and model gate-space availability and gate utilization at Love Field. T he
City presented the preliminary results of the consultants analysis in a November 20, 2014
meeting with the four carriers. The consultants analysis concluded that as of November 5, 2014,
it was possible and feasible for Love Field to accommodate Deltas five daily flights.
RESPONSE: Southwest admits that a consultant opined that as of November 5,
2014, it was possible to accommodate Deltas five daily flights at Love Field, but denies that
the methodology, opinions, and/or conclusions of the consultant were accurate and proper.
Southwest further denies the notion that any single date should be used for such
determination, since it does not take into consideration future plans of a signatory carrier
to fully utilize its leased space for its own operations. Southwest admits the remaining
58.
The City announced its proposed accommodation policy less than two weeks
later, on December 1, 2014. The Citys proposed policy confirms that the City will begin its
accommodation analysis by determining a Snapshot Date that will start the time period for
assessing reasonable accommodation. Although City policy sets the Snapshot Date at the day

PAGE 30
of the request, the City has represented in writing that it will treat November 5, 2014, as the
Snapshot Date for purposes of evaluating Deltas request for accommodation of its five flights.
Delta has consented to and relied on the Citys use of November 5, 2014, as the Snapshot Date.
Southwest lacks knowledge or information sufficient to form a belief as to the last sentence
of paragraph 58.
Southwest denies any allegation that the proposed accommodation
policies sent by the City on December 1, 2014, constituted formal City policy.
Southwest also denies that a so-called snapshot date has any legal validity under the
Love Field Lease or other applicable law. Southwest denies the remaining allegations of
paragraph 58.
59.
Once a Snapshot Date is selected, the Citys policy requires the City to
determine what schedule will be used for assessing scheduled operations. Normally, this will
be the schedule for the six months following the Snapshot Date. With the Citys having
selected November 5, 2014, as the Snapshot Date, City policy indicates that the City should
assess Southwests scheduled operations based on Southwests schedule from November 5,
2014, to May 4, 2015. During that six-month window, Southwest was operating between 149
and 153 flights per day out of sixteen gates at Love Field. Given that each gate at Love Field can
accommodate at least ten flights per day, Southwest could accommodate Deltas five daily
flightsless than 3% of what Southwest would flyon one of its sixteen leased gates without
any disruption to or interference with its operations. Moreover, Southwest acquired even more
gate capacity when it subleased two gates from United in April 2015.
RESPONSE: Southwest admits that it acquired additional gate space when it
subleased two gates from United but denies the remaining allegations in paragraph 59.

PAGE 31
60.
At the same time the City announced its Love Field accommodation policy, the
City renewed its promise to accommodate Delta at Love Field. In a December 1, 2014 letter to
Delta, Southwest, and Virgin America, the City acknowledged that Delta had exhausted all
reasonable efforts to secure voluntary accommodation and formally initiated the 30-day
countdown contemplated by Section 4.06 of the Airport Use and Lease Agreements. The City
instructed each of the three incumbent carriers to consider whether it can accommodate Deltas
request for accommodation and represented to the incumbent carriers and Delta that if Delta
has not been accommodated within 30 days, the City will select a signatory airline to comply
with Deltas accommodation request in a non-discriminatory manner to the extent that
accommodation will not unduly interfere with the signatory airlines operating schedule.
The
City reiterated that [o]n December 31, 2014, if we have not received notification that Delta has
been voluntarily accommodated, the City will make a mandatory accommodation as provided in
the Use and Lease Agreement. Despite this promise, and despite the fact that the City never
received a notice of voluntary accommodation, December 31, 2014, came and went without the
Citys honoring its promise and making a mandatory accommodation.
RESPONSE: Southwest defers to the Citys December 1 letter for its precise
wording.
Southwest admits that the City did not force an accommodation of Delta.

61.
With Deltas Gate Use and Facilities Use License Agreements expiring on
January 6, 2015, the Citys failure to make good on its promise to force accommodation by the
end of December left Delta with no choice but to again enter into a short-term agreement on
unfavorable terms that would enable it to continue operating out of Love Field. Accordingly, on

PAGE 32
January 6, 2015, Delta entered into two agreements with United that allowed Delta to continue
operating at Love Field until July 6, 2015.
RESPONSE: Southwest admits that Delta entered into agreements with United that
allowed Delta to continue running its five flights to Atlanta from Love Field until July 6,
2015. Southwest denies the remaining allegations in paragraph 61.
62.
On January 5, 2015, the City made still another promise to accommodate Delta at
Love Field. In a letter to Delta, the DOT, Southwest, and United, the City explained that its
preference was to see the carriers [] reach a permanent consensual resolution concerning Deltas
request for gate accommodation so that the City would not hav[e] to mandate accommodation
but reiterated and reaffirmed that the City will continue our mandatory accommodation process
unless informed by carriers that it is no longer necessary. The referenced mandatory
accommodation process is the process begun by the Citys December 1, 2014 letter, in which
the City promised that it will make a mandatory accommodation of Delta at Love Field.
RESPONSE: Southwest defers to the text of the Citys January 5 letter for its
precise wording. Southwest denies the remaining allegations of paragraph 62.
63.
On January 28, 2015, the City yet again promised to accommodate Delta at
Love Field. When it consented to Southwests sublease of two gates from United (see
discussion infra VIII), the City represented that it was treating the DOTs December 17,
2014 letter (see discussion infra VII) as promulgating final and binding directives that
governed the Citys handling of the request for accommodation at Love Field by Delta. The
DOTs December 17, 2014 letter stated that the DOT expected the City to accommodate
Delta at Love Field if possible. The relevant data establishes that it is possible to
accommodate Delta at Love Field. Thus, the Citys statement in its written consent is a further

PAGE 33
acknowledgement and representation that the City is subject to and will comply with the DOTs
binding directive that Delta should be accommodated at Love Field.
RESPONSE: Southwest admits that it subleased Uniteds two Love Field gates and
that the City consented to the sublease, as required by the Lease. Southwest defers to the
text of the Citys consent for its precise wording.

64.
On February 23, 2015, Delta requested accommodation of eight more daily flights
at Love Field beginning August 15, 2015. Delta made its request to Southwest, Virgin, and
Seaport. Delta also notified the City of its request for accommodation. As of February 23,
2015the date of Deltas accommodation requestit was possible to accommodate an
additional eight daily Delta flights at Love Field in light of the incumbent carriers then-current
gate usage and without impacting their current or already-announced, for-sale services. Not
coincidentally, on February 26, 2015, Southwest first announced its intention to expand its flight
schedule at Love Field to 180 daily flights as of August 9, 2015.
RESPONSE: Southwest admits the allegations in the first and second sentences of
paragraph 64. Southwest lacks knowledge or information sufficient to admit or deny
allegations in the third sentence of paragraph 64. Southwest denies the allegations in the
fourth sentence of paragraph 64.
Southwest admits that Southwest announced an
expanded flight schedule at Love Field that would ultimately result in 180 daily flights as of
August 9, 2015, as part of its gradual ramp-up of flights following the sunset of the Wright
Amendment restrictions. Southwest denies the remaining allegations in paragraph 64.
65.
Neither Southwest, Virgin, nor Seaport agreed to voluntarily accommodate
Deltas request for eight additional flights.
On February 27, 2015, Southwest responded to

PAGE 34
Deltas accommodation request, stating that it would not offer any accommodation beyond July
19, 2015. On March 10, 2015, Virgin sent a letter to Delta stating that it would refuse to
accommodate Deltas request for eight additional flights. Seaport failed to respond to Deltas
request by the requested response date of March 9, 2015.
RESPONSE: Southwest admits that Southwest did not agree to accommodate
Deltas requested eight additional flights because Southwest was going to be fully utilizing
its gates.
Southwest lacks knowledge or information sufficient to admit or deny the
remaining allegations of the first sentence of paragraph 65.

allegations of the second sentence of paragraph 65.
Southwest admits the
Southwest lacks knowledge or
information sufficient to admit or deny the remaining allegations of paragraph 65.

66.
On April 28, 2015, Delta notified the City that it had exhausted all reasonable
efforts to secure voluntary accommodation for the additional eight flights and requested that the
City accommodate its original five-flight request and notify the incumbent carriers of the need to
accommodate Deltas request for eight additional flights.
RESPONSE: Southwest lacks knowledge or information sufficient to admit or deny the
67.
Over the next several weeks, Delta continued to ask the City to honor its repeated
promises and adhere to DOTs directive by accommodating Delta at Love Field. Delta advised
the City repeatedly, including by email on May 25, 2015, that Delta was relying on the Citys
repeated representations that the City intended to force accommodation at Love Field.
RESPONSE: Southwest lacks knowledge or information sufficient to admit or deny the
VII.
DOTs Directive Requiring the City to Accommodate Delta at Love Field.

PAGE 35
68.
On December 17, 2014, DOT provided the City with binding, enforceable
direction on how to handle Deltas pending request for long-term accommodation at Love Field
and comply with its federal obligations. DOT provided its direction in the form of a letter to the
City from its general counsel, the Honorable Kathryn B. Thomson. In its December 17 letter,
DOT clarified four important points concerning the existence and contours of the Citys
accommodation obligation.
RESPONSE: Southwest admits that the DOT sent a letter to the City on December
17, 2014 stating certain (unsupported) opinions regarding accommodation at Love Field.
69.
First, DOTs December 17 letter confirmed that the City is obligated under
existing federal law to accommodate Delta at Love Field: Our competition plan policy requires
airport proprietors to assist requesting carriers seeking access, and we expect that, if a requesting
carrier is unable to arrange a voluntary accommodation with a signature carrier, the City will
accommodate the requesting carrier to the extent possible given the current gate usage, without
impacting current or already-announced, for-sale services by the signatory carriers.
The
relevant dataincluding the findings and analysis of the Citys own consultantestablishes that
there was more than ample space at Southwests gates and Uniteds gates for Deltas requested
five flights on the Citys snapshot date of November 5, 2014.
In addition, the relevant data
establishes that there was more than ample space at Southwests gates to accommodate Deltas
additional requested eight flights when they were requested on February 23, 2015.
In light of
this data, DOTs December 17 letter is an unconditional directive requiring the City to
accommodate Delta.

PAGE 36
RESPONSE: Southwest denies that the December 17 letter said that the City is
obligated to accommodate Delta at Love Field. Southwest defers to the text of the DOTs
December 17 letter for its precise wording. Southwest denies the remaining allegations in
paragraph 69, including footnote 2.
70.
Second, DOT specified that the determination of whether accommodation is
possible given the current gate usage should be made based on the available space on the
snapshot date of the original accommodation request. Thus, if an incumbent carrier announces
plans for a future increase in service after receiving a request for accommodation, the City
should not consider those planned future service increases when determining whether
accommodation is possible. A flight may be considered as part of the accommodation analysis
only if it was either current[ly] operated or part of the signatory carriers already-announced,
for-sale services as of the date of the accommodation request.
RESPONSE: Southwest defers to the text of the DOTs December 17 letter for its
precise wording, but remarks that many of the statements in the DOTs December 17 letter
are wholly unsupported by law or prior DOT or FAA policy, and are inconsistent with the
Love Field Lease, the Five Party Agreement, and WARA. Southwest denies the remaining
71.
Third, DOT clarified that the City is required to provide accommodation on a
long-term basis and cannot make Deltas right to operate at Love Field subordinate or secondary
to the right of any incumbent carrier:
With respect to the length of the accommodation, for the accommodation to be
meaningful at [Love Field], it is our position that, once accommodated, the
accommodated carrier is entitled to an ongoing similar pattern of service as long
as the carrier continues to operate the accommodated flights. Importantly, the
accommodated carrier should not be pushed out by incumbent carriers at a later
date.

PAGE 37
The City thus has a responsibility to continue the accommodation and ensure that space is
available so that the requesting carrier is able to maintain its pattern of service on an ongoing
basis.
72.
Finally, DOTs December 17 letter reaffirms that [t]he City must also ensure that
the accommodation is at reasonable rates.
Specifically, DOTs competition plan policy
provides that subleasing rates covering the signatory carriers direct leasing costs for the pro-rata
share of subleased facilities, plus a reasonable allowance for administration not to exceed 25%,
are reasonable.
73.
After the December 17 letter, there could be no doubt that the City was required
by the DOTs construction of the grant assurances to order that Delta be accommodated.
74.
On June 15, 2015, DOT sent the City a second letter. The June 15 letter
confirmed that the Citys obligation to accommodate Delta is a matter of federal law

PAGE 38
specifically, it flows from the AIP grant-assurances statute, the AIP grant agreements, and the
competition-plan statute. DOT also reiterated the common-sense, competition-promoting
proposition that a dominant signatory carrier should not be able to block a requesting carrier
from accessing Love Field by announcing future plans to expand service [] after an
accommodation request is made. DOT concluded by confirming for the City that DOT
expected the City to carry out, in a reasonable and timely fashion, the accommodation efforts
we described in our December 17 letter.
RESPONSE: Southwest admits that the DOT sent the City a letter on June 15, 2015,
stating certain (unsupported) opinions regarding accommodation at Love Field. Southwest
denies that the June 15 letter said that the City is obligated to accommodate Delta at Love
Field. Southwest defers to the text of the DOTs June 15 letter for its precise wording, but
remarks that many of the statements in the DOTs June 15 letter are wholly unsupported
by law or prior DOT or FAA policy, and are inconsistent with the Love Field Lease, the
Five Party Agreement, and WARA. Southwest denies the remaining allegations in
paragraph 74.
75.
In sum, DOTs two letters direct the City to force accommodation of Delta at
Love Field to the extent possible given current gate usage at the time of Deltas request, without
impacting current or already-announced, for-sale services by the signatory carriers at Love Field.
And undisputed datanot to mention Southwests recent conductestablish that given the gate
usage at Love Field at the time of Deltas request to continue its existing flights, as well as at the
Citys selected snapshot date of November 5, 2014, there was room for Delta to be
accommodated for its five existing flights without impacting current or already-announced, forsale services by the signatory carriers at Love Field.
Similarly, when Delta requested an

PAGE 39
additional eight flights on February 23, 2015, there was space for those flights without impacting
current or already-announced, for-sale services by the signatory carriers.
VIII. The Citys Approval of Southwests Anti-Competitive Sublease from United.
76.
As set forth above, the City was required to, but did not, ensure that Delta was
accommodated at Love Field. The City was also required by the Lease Agreements to exercise
its rights hereunder [i.e., under the Lease Agreement] and otherwise operate the airport . . . in a
manner that is consistent with applicable law, federal aviation regulations, federal grant
assurances, and City airport revenue bond ordinances.
RESPONSE: Southwest denies the allegations in the first sentence of paragraph 76.
Southwest admits the remaining allegations of paragraph 76, and remarks that fulfilling
those obligations required the City to refuse to accommodate Delta.
77.
The Lease Agreements confer on the Signatory Airline (as relevant here, United)
the right to sublet the Leased Premises . . . to any party; provided, it shall first obtain the written
approval of the City Manager.
Southwest and United entered an agreement under which
Southwest would pay an obscene sum of money to United to obtain the near monopoly that the
subleased gates would provide it. Under that agreement, Southwest agreed that if it was forced
to accommodate another airline, it would do so on its own leased gates, not the gates subleased
from United.
Southwest and United notified the City of their agreement and sought City
Manager approval.
RESPONSE: Southwest admits the allegations contained in the first sentence of
paragraph 77. Southwest admits that it entered into a sublease with United for its Love

PAGE 40
Field gates and requested that the City consent to such sublease. Southwest denies the
78.
Pursuant to the terms of the Lease Agreements, the City Manager has unfettered
discretion regarding whether to grant such approval.
Alternatively, the City Managers
discretion is limited, at most, by a provision applicable by its terms only to consent required by
the City or the Airline, which requires that consent shall not be unreasonably withheld or
delayed.
79.
The City had more than adequate reasons to object to the sublease. First, the City
specifically undertook in Section 14.19 of the Lease Agreements to exercise its rights [under the
Lease] and otherwise operate the Airport with due regard for . . . the interests of the traveling
public. The interests of the traveling public are in more, not less, options from Love Field.
Because Delta had already formally requested accommodation, the City knew that the alternative
to greater Southwest concentration was greater competition from Delta. Approving the sublease
was thus contrary to the public interest and, as a result, prohibited by the Lease Agreement.
RESPONSE: Southwest defers to the text of the Lease for its precise wording.
Southwest denies the allegations of paragraph 79.
80.
Second, the City specifically undertook in Section 14.19 of the Lease Agreements
to exercise its rights [under the Lease] and otherwise operate the Airport . . . in a manner that is
consistent with applicable law, federal aviation regulations, federal grant assurances, and City
airport revenue bond ordinances.
Giving Southwest an exclusive right to the airport, and
discriminating in its favor in making decisions regarding access to the airport, would violate

PAGE 41
federal grant assurances. Accordingly, approving Southwests acquisition of such an exclusive

right was prohibited by the Lease Agreement.
Southwest denies the allegations of paragraph 80.
81.
Third, the City knew when it consented to the sublease that Southwest and United
each had room to accommodate Delta, but that both were opposing accommodation on the basis
that Southwest would use Uniteds gates once those gates were subleased. Accordingly, its
decision to consent despite the fact that Southwest and United were working together to exclude
Delta facilitated the effort to frustrate Deltas contractual rights.
RESPONSE: Southwest denies that Delta has any contractual rights at Love
Field, aside from the current temporary license agreement pursuant to which it is
operating. Southwest denies the remaining allegations of paragraph 81.
82.
Despite these substantial reasons to refuse consent to the sublease, Southwest
bullied and threatened the City into granting it the consent it sought. And despite DOTs clear
statements to the City that Delta should be permanently accommodated before the sublease was
approved, the City did not require that Delta first be accommodated. However, the City did
represent that it was treating the 2014 Letter as promulgating final and binding directives to
foreclose any allegation that the City is in violation of its federal grant assurances and to avoid
the risk of losing federal grants or passenger facility charges. Yet despite this representation,
the City has failed to act in accordance with the grant assurances or the DOT Letters.
RESPONSE: Southwest defers to the Citys consent of the United-Southwest
sublease for its precise wording.
paragraph 82.

PAGE 42
IX.
This Action.
83.
Rather than following the course of action outlined in the DOT Letters, on June 17,
2015, the City initiated this action in federal court, seeking declaratory relief pursuant to 28
U.S.C. 2201 regarding Defendants and the rights and obligations of the City and Defendants
under federal law concerning the use of aircraft gates at the Dallas Love Field airport.
RESPONSE:
Southwest admits that the City initiated this action seeking
declaratory relief, but defers to the Citys complaint for its precise wording and request for
relief. Southwest denies the remaining allegations of paragraph 83.
84.
By initiating this action, the City waived any governmental immunity from suit
and any procedural requisites to suit as to the transactions or occurrences that are the subject
matter of the Citys complaint.
RESPONSE: Southwest admits the allegations of paragraph 84.
85.
On June 19, 2015, Delta provided written notice to the City confirming its
exhaustion of [its] good-faith efforts to resolve [its] longstanding request for accommodation at
Dallas Love Field and electing to view the City [as] in breach of its obligation to
accommodate Delta.
In that letter, Delta notified the City that it would be seeking legal
recourse.
the allegations of paragraph 85.
ANSWER TO COUNTERCLAIMS AGAINST CITY
Counterclaim I:
86.
Declaratory Judgment That Delta Must Be Accommodated.
Delta incorporates by reference the allegations of all of the preceding paragraphs
as though fully set forth in this Counterclaim I.

PAGE 43
RESPONSE: No response is necessary.

87.
There exists a justiciable case or controversy between Delta and the City as to
whether the City is required to force accommodation of Delta at Love Field.

RESPONSE: Paragraph 87 contains a legal conclusion and thus no response is
necessary. To the extent a response is deemed required, Southwest denies the allegations in
paragraph 87.
88.
This case is within the Courts subject matter jurisdiction, and the Court has
jurisdiction over all the parties to this case.

RESPONSE: Southwest admits the allegations contained in paragraph 88.
89.
When Delta requested accommodation of six flights in June 2014, both Southwest
and United could have accommodated those flights without undue interference with their
operating schedule. Similarly, when Delta requested accommodation of eight additional flights
in February 2015, after Southwest subleased Uniteds gates, Southwest could have
accommodated those flights without undue interference with its operating schedule. The Lease
Agreement unambiguously requires the City to force permanent accommodation of Delta at Love
Field.
90.
The Five Party Agreement, the Competition Plan and its updates, the Wright
Amendment Reform Act, and DOTs recent directives are all consistent with the Lease
Agreement and designed to effectuate the Lease Agreements accommodation provisions and
obligations.

PAGE 44
91.
Under substantial pressure and threats from Southwest, the City did not require
that Delta be permanently accommodated at Love Field, despite the Lease Agreements, the
DOTs letters, and federal law.
The Citys failure to force accommodation of Delta at Love
Field has caused, and if not corrected will continue to cause, Delta to suffer injury.
RESPONSE: Southwest admits that the City has never forced an accommodation of
Delta. Southwest denies the remaining allegations of paragraph 91.
92.
Delta seeks a declaration under 28 U.S.C. 2201 that the City has an obligation to
require that Delta be accommodated at Love Field for the flights requested in its June 2014 and
February 2015 letters.
RESPONSE: Southwest admits that Delta seeks the relief it requests, but denies
that Delta is entitled to any relief.
Counterclaim II:
Declaratory Judgment That the City Must Reclaim Two Gates for
Common Use.
93.
as though fully set forth in this Counterclaim II.

94.
There exists a justiciable case or controversy between Delta and the City as to
whether the City violated the Lease Agreements when it approved the sublease and thereby
granted an exclusive right to Southwest.
RESPONSE: Paragraph 94 contains a legal conclusion and thus no response is
necessary. To the extent a response is deemed required, Southwest denies the allegations in
paragraph 94.

PAGE 45
95.

96.
The City had discretion under the Lease Agreements to approve or disapprove
Uniteds sublease to Southwest. When the City approved that sublease, despite the fact that it
gave Southwest an exclusive right at Love Field and was contrary to the public interest, it
violated, at a minimum, Section 14.19 of the Lease Agreements.
97.
The only way to remedy the exclusive rights violation caused by the Citys action
is to declare that Southwest must divest two gates, limiting its control over Love Field to 80% of
the available gates as contemplated in the Lease Agreement and Five Party Agreement. As the
DOJ has recognized, permitting Southwest to have 18 of the 20 gates would destroy meaningful
competition at Love Field.
98.
Because Southwest and United allocated the risk of forced accommodation to
Southwest through the sublease provision requiring that any accommodation be done on gates
other than those subleased from United, the proper remedy is for Southwest to divest two of its
other gates. Pursuant to Section 4.06(E), the two gates should become Common Use Gates
under the control of the City.
99.
The Citys wrongful approval of the sublease agreement due to pressure from
Southwest has caused, and if not corrected will continue to cause, Delta to suffer injury.

PAGE 46
100.
Accordingly, Delta seeks a declaration under 28 U.S.C. 2201 that Southwest
may not have lease or sublease rights to more than 16 gates, and that the City must reclaim two
Love Field gates to be utilized as common use gates.
RESPONSE: Southwest admits that Delta seeks the relief it requests, but denies
Counterclaim III:
101.
Breach of the Lease Agreements
as though fully set forth in this Counterclaim III.

102.
The Lease Agreements are valid, enforceable contracts.

103.
As a new entrant to Love Field and/or a carrier seeking to provide service at Love
Field and/or a signatory to a gate use license agreement, Delta is an intended and/or
contemplated and/or third-party beneficiary of the Lease Agreements. As such, Delta is a proper
party to sue for breach of these Agreements.
104.
By seeking to provide service at Love Field and/or enter Love Field as a new
entrant carrier, exhausting all reasonable efforts to secure voluntary accommodation from the
incumbent carriers, and taking the proper steps to invoke its right to forced accommodation,
Delta performed its obligations under the Lease Agreements and thus satisfied every condition
precedent under the contract to trigger the Citys obligation to force the accommodation of Delta.

PAGE 47
105.
In addition, or in the alternative, the Lease Agreements are in writing, state the
essential terms of the agreement between Delta and the City, promise that the City will provide
Delta with a benefit if Delta performs, and were executed on behalf of the City. Accordingly,
each of the Lease Agreements is a valid and enforceable unilateral contract between Delta and
the City.
106.
Delta formed a contract with the City by performing under the Lease Agreement.
Delta performed under the Lease Agreement by seeking to provide service at Love Field and/or
enter Love Field as a new entrant carrier, exhausting all reasonable efforts to secure voluntary
accommodation from the incumbent carriers, and taking the proper steps to invoke its right to
forced accommodation. As a party to the unilateral Lease Agreement contract, Delta is a proper
party to sue for breach of the unilateral Lease Agreement contract.
107.
The City breached the Lease Agreementsincluding, without limitation, the
provisions of section 4.06by inter alia, (1) failing to force accommodation of Deltas request
for five flights at Love Field within 30 days of the Citys December 1, 2014 letter; (2) failing to
subsequently force accommodation of Deltas request for five flights after Delta exhausted its
good-faith efforts to obtain its requested accommodation; (3) failing to notify the incumbent
carriers of the need to accommodate Deltas request for eight additional flights after Delta
exhausted all reasonable efforts to secure voluntary accommodation for that request; and (4)
failing to force accommodation of Deltas request for eight additional flights.

PAGE 48
108.
In addition, section 14.19 of the Lease Agreement requires the City to operate
Love Field in a manner that is consistent with federal grant assurances.

RESPONSE: Southwest defers to the language of section 14.19 of the Lease for its
precise wording, but denies that the grant assurances require accommodation of Delta.
109.
Grant assurance 22, Economic Nondiscrimination, requires the City to make
the airport available as an airport for public use on reasonable terms and without unjust
discrimination to all types, kinds and classes of aeronautical activities, including commercial
aeronautical activities offering services to the public at the airport. By failing to provide Delta
long-term gate access at Love Field despite providing long-term access to similarly situated
airlines, the City has violated Grant Assurance 22.
RESPONSE: Southwest admits the allegations in the first sentence of paragraph
109. Southwest denies the allegations in the second sentence of paragraph 109.
110.
Grant assurance 23, Exclusive Rights, requires the City to permit no exclusive
right for the use of the airport by any person providing, or intending to provide, aeronautical
services to the public. By unreasonably and without just cause excluding Delta from operating
at Love Field, denying Delta the continued opportunity to be an aeronautical service provider at
Love Field, and ceding control of Love Fields gates to a small number of airlines while
unreasonably excluding Delta from the same long-term gate access it has granted to others, the
City has violated Grant Assurance 23.
RESPONSE: Southwest admits the allegations in the first sentence of paragraph
110. Southwest denies the allegations in the second sentence of paragraph 110.

PAGE 49
111.
By violating Grant Assurances 22 and 23, the City has breached section 14.19 of
the Lease Agreement.

112.
In addition, the City breached section 14.19 of the Lease Agreement by approving
Uniteds sublease to Southwest, because approving the sublease was contrary to the interests of
the traveling public and contrary to the requirements of applicable law, federal aviation
regulations, federal grant assurances, and/or City airport revenue bond ordinances.
113.
The Five Party Agreementincluding, without limitation, the provisions of
article 1.3.bconfirms that the Lease Agreements obligate the City to force accommodation of
Delta at Love Field and further confirms that the Citys failure to abide by the forcedaccommodation provisions of the Lease Agreements is a breach of the Lease Agreements.
114.
The Citys Competition Plan as updatedincluding, without limitation, the
provisions of Section 1(F) of the Competition Plan, section 4 of the 2005 Competition Plan
update, and sections 1 and 1(b) of the 2009 Competition Plan updateconfirms that the Lease
Agreements obligate the City to force accommodation of Delta at Love Field and further
confirms that the Citys failure to abide by the forced-accommodation provisions of the Lease
Agreements is a breach of the Lease Agreements.
It further confirms that the City acted
unlawfully when it approved the sublease despite the fact that it would affirmatively harm

PAGE 50
115.
The Wright Amendment Reform Actincluding, without limitation, the
provisions of section 5(a)confirms that the Lease Agreements obligate the City to force
accommodation of Delta at Love Field and further confirms that the Citys failure to abide by the
forced-accommodation provisions of the Lease Agreements is a breach of the Lease Agreements.
116.
The DOTs December 17, 2014 letter and June 15, 2015 letterboth individually
and jointlyconfirm that the Lease Agreements obligate the City to force accommodation of
Delta at Love Field and further confirm that the Citys failure to abide by the forcedaccommodation provisions of the Lease Agreements is a breach of the Lease Agreements.
117.
The Citys breaches of the Lease Agreements have caused, and if not corrected
will continue to cause, Delta to suffer significant and irreparable injury as a natural, probable,
and foreseeable consequence.
118.
There is no adequate remedy at law for the Citys breach of the Lease
Agreements, and damages would be inadequate compensation.
Delta has performed its
obligations under the Lease Agreements. Accordingly, Delta is entitled to specific performance
by the City of the Lease Agreements.
119.
Delta has substantially complied with all applicable and valid notice
requirements, including, to the extent applicable and valid, the requirement under Section 2-86 of
the Dallas City Code to provide notice of a breach of contract claim for damages within 180 days
of the breach. The 180-day period had not expired on June 17, 2015, when the City filed its

PAGE 51
complaint. The City is equitably estopped from arguing otherwise because, until the City filed
its complaint, it represented to Delta that it intended to force accommodation of Deltas requests,
and Delta reasonably relied on that representation. By filing the complaint, the City waived any
remaining requirement for Delta to give notice to the City before filing its breach-of-contract
claims.

PAGE 52
ANSWER TO DELTAS AMENDED COUNTER- AND CROSSCLAIMS

AGAINST SOUTHWEST AND CROSSCLAIM AGAINST UNITED AIRLINES, INC.
Any allegation not expressly admitted is denied.
I.
120.
ANSWER TO INTRODUCTION2
For over thirty years, Southwest flew from Love Field under the tight constraints
of the Wright Amendment. Headquartered on the edge of Love Field, Southwest considers Love
Field to be its home airport.
Despite repeated entreaties from DFW, Southwest has long
considered Love Field the only airport worth entering in the Dallas-Fort Worth area, and, in the
years leading up to the Five Party Agreement, flatly refused to operate from DFW.
RESPONSE: Southwest admits that operated at Love Field under the constraints of
the Wright Amendment for over 30 years. Southwest admits that it has never operated
from DFW. Southwest denies the remaining allegations of paragraph 120.
121.
At some point, however, Southwest stopped thinking of Love Field as just its
home airport, and started thinking of the public airport as Southwests very own property.
Southwest began to conceive of the Wright Amendment Reform Act as a law that was all about
helping Southwest to expand, rather than being about the lifting of restrictions on a public
airport. Indeed, Southwests CEO Gary Kelly asserted to City Manager A.C. Gonzalez that Love
Field was the airport we [Southwest] first saved from elimination by the city and then rebuilt at
no cost to the city. Accordingly, Southwest came to the conclusion that it had an entitlement to
control Love Field.
RESPONSE:
Southwest admits that Mr. Kelly made the quoted statement.

2
In the interests of consistency and concision, and as authorized by Federal Rule of Civil Procedure 10(b), this
complaint incorporates by reference the allegations in Deltas complaint against the City instead of reprinting those
allegations in full. Deltas complaint against the City contains 119 numbered paragraphs. Accordingly, and with the
aim of avoiding confusion in Southwests answer to this complaint, this complaint begins with paragraph 120.
PAGE 53
122.
Southwests feeling of entitlement is rooted in its view that it has contributed so
much to the City of Dallas that it deserves its own airport. Mr. Kelly asserted that, by his
calculation, Southwest had generated over $4 billion in local economic activity, contributed $2
billion to the Dallas area GDP, aided in the creation of over 22,000 jobs, paid $1 billion in
salaries, wages, and benefits to 8,000 Dallas area employees, paid $42 million in taxes in the
Dallas area, and supported 428 local civic and charitable organizations with cash and/or free
travel. Given that, Southwest saw any attempt by the City of Dallas to preserve competition,
rather than to promote Southwest, as a personal betrayal.
RESPONSE:
Southwest admits that it has generated over $4 billion in local
economic activity, contributed $2 billion to the Dallas area GDP, aided in the creation of
over 22,000 jobs, paid $1 billion in salaries, wages, and benefits to 8,000 Dallas area
employees, paid $42 million in taxes in the Dallas area, and supported 428 local civic and
charitable organizations.
Southwest admits that Mr. Kelly has discussed these
accomplishments. Southwest denies the remaining allegations of paragraph 122.

123.
Regardless of what Southwest feels it is entitled to, however, Love Field is a
public airport, funded in large part by the federal and local governments and fees paid by the
traveling public. The City is not allowed to hand the keys to the airport to Southwest and permit
it to lock all competition out. Instead, as the FAA reaffirmed just last month in announcing its
investigation of the Citys conduct at Love Field, Congress found that [m]ajor airports must be
available on a reasonable basis to all carriers wishing to serve those airports. As a result of this
congressional mandate, echoed in its promises to the FAA in connection with receipt of federal
funds, the City adopted a Competition Plan in which it promised to accommodate new carriers.
The City and the signatory airlines (Southwest, United, and American),2 further agreed to leases
PAGE 54
for gates at Love Field that not only permitted, but required, the signatory airlines and the City to
accommodate other carriers.
RESPONSE: Southwest admits that Love Field is a public airport which receives
funding from, among other sources, the federal and local governments, fees paid by the
traveling public, and fees, rentals, and other charges paid by airlines operating at the
airport. Southwest admits that FAA made the quoted statement, but defers to the text of
the statement for its precise wording.
paragraph 123.
124.
The City approached the accommodation process diligently, and repeatedly
promised Delta that it would be accommodated. However, Southwest continued a campaign of

heavy pressure on the City to acquiesce in Southwests effort to completely control the airport.
According to the Citys own internal communications, it understood Southwest to promise[]
major trouble if [the] City granted full Delta accommodation request. After the City told United
it would have to accommodate Delta, Southwest promptly sent an angry letter to the City on
September 23, 2014 accusing it of summarily dismiss[ing] the needs of a longtime partner of
the City of Dallas. And on September 24, Mr. Kelly sent a private email to City Manager A.C.
Gonzalez, threatening to mov[e] on to focus our corporate investments in those markets that
place a value on them and their corporate residents.
RESPONSE: Southwest defers to the text of the cited communications for their
precise wording. Southwest denies the remaining allegations of paragraph 124.
125.
The City backed down. On September 29, 2014, the Citys Director of Aviation
sent a cursory letter telling Delta that [b]ased on the schedules recently provided and the Gate
Use License Agreement between Southwest Airlines and United Airlines, Delta would not be
PAGE 55
accommodated. While this was in the interest of Southwestwhich entrenched its dominance
over the airportand Unitedwhich preserved its opportunity to profit handsomely on its two
gates for facilitating Southwests monopoly effortsit was contrary to the interests of the City of
Dallas and its citizens, who have the true entitlement to the airport.
RESPONSE: Southwest defers to the text of the cited communication for its precise
wording. Southwest denies the remaining allegations of paragraph 125.
126.
The very week that the City sent a cursory note denying Deltas accommodation
request, Southwest and United reached an agreement that Southwest would pay a kings ransom
to United for rights to its two gatesthe very gates at which Delta had been seeking
accommodationthereby attempting to foreclose an argument that the space should be made
available to Delta and other airlines interested in serving Love Field.
That agreement was
executed on October 6, 2014, but was subject to the Citys approval.

RESPONSE: Southwest admits that it entered into a sublease with United for its
two Love Field gates and that the City was required to consent to that sublease. Southwest
denies the remaining allegations of paragraph 126.
127.
The DOT made it clear to the City that it opposed any approval of the sublease
until Delta was accommodated. However, after months of pressure from Southwest and United,
the City backed down again. On January 28, 2015, the City approved the sublease agreement,
without requiring Deltas accommodation as a condition of its approval.
RESPONSE:
Southwest admits that the City approved the United-Southwest
sublease on January 28, 2015. Southwest denies the remaining allegations of paragraph
127.

PAGE 56
128.
Southwest and United breached their contracts with the City by refusing to
accommodate Delta and by entering into a sublease agreement that not only impaired Deltas
exercise of its right to accommodation, but conferred on Southwest an exclusive right to Love
Field. That exclusive right is not only prohibited by the Lease Agreements, but is contrary to
federal law and the grant assurances that place conditions on the Citys receipt of federal funds.
129.
The Court should declare that Delta is entitled to accommodation for the 13
flights it requested because there was availability on the date of Deltas requests. Southwest and
United may not revoke Delta's right to provide, and that of the flying public to benefit from,
meaningful competition at Love Field by actions they or either of them took to undermine
Deltas accommodation right. In order for accommodation to result in real competition, the
Court should also declare that Southwest is limited to 16 gates, and, therefore, is required to
transfer two gates back to the City for its use in implementing its competition policy, and that of
the federal government, at Love Field. In the alternative, the Court should declare that the
competition-killing transfer from United to Southwest should be rescinded and United should be
required to disgorge the money it received from Southwest for that monopoly-creating transfer
and to accommodate Delta on the gates it subleased to Southwest.
Parties
130.
Counter- and/or Cross-Plaintiff Delta Air Lines, Inc. is a Delaware corporation
whose principal place of business is located at 1030 Delta Boulevard, Atlanta, Georgia 30354.
Delta is an air carrier engaged in the business of providing commercial passenger air

PAGE 57
transportation throughout the United States and the world. Delta is a citizen of the States of
Delaware and Georgia.
131.
Counter- and/or Cross-Defendant Southwest Airlines Co. is a Texas corporation
with its principal place of business in Dallas County, Texas. Southwest is a citizen of Texas.
132.
Cross-Defendant United Airlines, Inc. is a Delaware corporation with its principal
place of business in Chicago, Illinois. United is a citizen of the States of Delaware and Illinois.
the allegations in paragraph 132.
Jurisdiction and Venue
133.
This Court has jurisdiction over Deltas claims against Southwest under 28 U.S.C.
1332(a)(1) because the matter in controversy exceeds the sum or value of $75,000, exclusive of
interest and costs, and is between citizens of different States.
134.
To the extent this Court does not have original jurisdiction of any counter- and/or
cross-claim(s) asserted in this action, this Court has supplemental jurisdiction under 28 U.S.C.
1367 because the Court has original jurisdiction of the action and all of the claims, counterclaims, and cross-claims asserted herein are so related to one another that they form part of the
same case or controversy under Article III of the United States Constitution.

PAGE 58
135.
Venue in this Court is proper under 28 U.S.C. 1391(b)(2) because a substantial
part of the events and omissions giving rise to Deltas counter- and/or cross-claims occurred in
this judicial district.
Background and Facts
136.
Delta re-alleges and incorporates by reference as though fully set out herein the
allegations contained in Paragraphs 1 through 85 of its Amended Complaint and Counterclaims

Against the City of Dallas (ECF 133).
Breaches of and Tortious Interference with the Lease Agreements
137.
Under the Airport Use and Lease Agreement between the City and Southwest
(Southwest Lease Agreement), Southwest is subject to an accommodation obligation that is

antecedent to any accommodation obligation of the Citys. The Southwest Lease Agreement
imposes a binding duty on Southwest to voluntarily accommodate requests from new entrant
carriers (i.e., carriers who do not have a lease with the City) to provide service at Love Field.
The Southwest Lease Agreement imposes that duty for the benefit of new-entrant carriers such as
Delta. If it is possible for Southwest to accommodate a request for new service from a new
entrant carrier without unduly interfering with its own operating schedule, Southwest must do so.
If Southwest refuses to provide voluntary accommodationand it is not allowed to refuse unless
the new entrants proposed flight schedule would conflict with Southwests then-existing flight
schedule (including any future flight schedule that is already-announced and already-for-sale)
then the City is obligated to force accommodation of the new entrant.

PAGE 59
RESPONSE: Southwest admits that the Lease contains provisions for the possible
accommodation of new entrant carriers for temporary periods of time and under certain
conditions, and defers to the text of the Lease for its precise wording. Southwest denies
that Delta is a new entrant carrier.
paragraph 137.
138.
The Airport Use and Lease Agreement between the City and United (United
Lease Agreement) contains terms materially identical to those in the Southwest Lease
Agreement.
Because the Southwest Lease Agreement and the United Lease Agreement
(collectively, the Lease Agreements) impose identical duties, they can be described together.
the allegations of paragraph 138.
139.
Specifically, Section 4.06(F) of the Lease Agreements details the process for
accommodation, stating that facilities at [Love Field] may become a scarce resource if a new
entrant airline (Requesting Airline) requests to provide service at the Airport.
In such
circumstances, [Southwest or United] agrees to accommodate such Requesting Airline at its

Lease Premises at such times as will not unduly interfere with its operating schedule and upon
such reasonable terms as may be agreed upon between [Southwest or United] and the Requesting
Airline, taking into consideration all the circumstances of such an accommodation agreement.
Southwest and the City intended to secure a benefit for new-entrant carriers such as Delta when
they entered into Section 4.06(F) of the Southwest Lease Agreement.
United and the City
intended to secure a benefit for new-entrant carriers such as Delta when they entered into Section
4.06(F) of the United Lease Agreement.
And the Lease Agreements secure a direct, non-
incidental benefit for Delta: the right to be accommodated at Love Field.

PAGE 60
RESPONSE: Southwest admits that section 4.06(F) of the Lease contains provisions
regarding accommodation.
Southwest defers to the text of the Lease for its precise
wording. Southwest denies the remaining allegations of paragraph 139.

140.
Neither Southwest nor United can avoid its accommodation obligations and defeat
the Requesting Airlines right to accommodation by refusing to agree[] upon reasonable

terms
for the accommodation.
Instead,
Section 4.06(F)(4)(c) provides that in the event
Southwest or United and the Requesting Airline cannot resolve a dispute over reasonable fees
and charges or any other matter regarding this scarce resource provision, the City will issue a
binding decision setting the terms of the accommodation.
141.
Under the Lease Agreement, the determination of whether Southwest or United
can accommodate the Requesting Airline without unduly interfer[ing] with its operating
schedule is answered as of the date of the Requesting Airlines accommodation request.
In
other words, the dispositive question is whether the level of gate usage required by Southwests
or Uniteds then-current flight scheduleincluding any future flight schedule that is alreadyannounced and already-for-saleis such that Southwest or United can accommodate the
Requesting Airlines proposed flight schedule without unduly interfering with its operations. If
so, the Lease Agreement requires Southwest and United to accommodate the Requesting Airline.
Importantly, Southwest and United cannot avoid their accommodation obligation and trump the
Requesting Airlines right to accommodation by increasing their flight schedules after they
receive a request for accommodation. Otherwise, Southwest or United could defeat the whole
point of the Leases forced-accommodation provisions.
PAGE 61

142.
Based on past operations at Love Field, it is possible to operate at least 11
departures per day out of a Love Field gate.

143.
Delta first requested accommodation from Southwest and United for its then-
current schedule of six flights on June 13, 2014. As of June 13, 2014, Southwest was operating
up to 140 daily departures out of its 16 Love Field gates. Southwest had not yet subleased
Uniteds two gates. Southwest had no additional future flights that were already-announced and
already-for-sale. United was operating only six or seven daily flights out of its two leased gates.
Southwest has consistently taken the position that it is possible to operate at least 10 departures
per day out of each Love Field gate, which is consistent with its operations at its hubs around the
country. Accordingly, on June 13, 2014, either Southwest or United could have accommodated
Deltas current schedule without unduly interfering with its own operating schedule. In addition,
Southwest could have made plans at that point to accommodate Delta on the gates Southwest
later subleased from United.
RESPONSE: Southwest admits that Delta requested Love Field gate access in June
2014. Southwest denies the allegations in the second sentence of paragraph 143, and
remarks that as of June 13, 2014, it had published a schedule with 149 peak day flights on
16 gates and was in the process of finalizing a scheduled (published on August 4, 2014) with
153 peak day flights on 16 gates. Southwest admits that, as of June 13, 2014, Southwest
had not yet published its 180-flight schedule for sale to the public. Southwest admits that
Southwest operating 10 flights per gate per day on its Love Field gates is full utilization of
those gates. Southwest admits that it had not subleased Uniteds gates as of June 13, 2014.
PAGE 62
Southwest lacks knowledge or information sufficient to form a belief as to how many flights
United was operating at its gates, or whether it could have provided Delta gate access.
144.
Delta reiterated its request to be accommodated for its current schedule of five
flights in a letter to the City on September 18, 2014. As of September 18, 2014, Southwest was
operating up to 118 daily departures out of its 16 Love Field gates, and Southwest had no
additional future flights that were already-announced and already-for-sale.
Southwest has
consistently taken the position that it is possible to operate at least 10 departures per day out of
each Love Field gate, which is consistent with its operations at its hubs around the country.
Accordingly, on September 18, 2014, Southwest could have accommodated Deltas current
schedule of five flights without unduly interfering with its own operating schedule.
RESPONSE: Southwest admits that that Southwest operating 10 flights per gate
per day on its Love Field gates is full utilization of those gates. Southwest denies the
remaining allegations in paragraph 144.
145.
The City indicated that it would consider November 5, 2014, to be the Snapshot
Date for purposes of evaluating Deltas request for accommodation of its current schedule of five
flights. As of November 5, 2014, Southwest was operating up to 149 daily departures out of its
16 Love Field gates, and Southwest had no additional future flights that were already-announced
and already-for-sale. Southwest has consistently taken the position that it is possible to operate
at least 10 departures per day out of each Love Field gate, which is consistent with its operations
at its hubs around the country. Accordingly, on November 5, 2014, Southwest could have
accommodated Deltas current schedule of five flights without unduly interfering with its own
operating schedule.
Indeed, a gate-use analysis commissioned by the City and performed by

PAGE 63
Leigh Fisher confirmed that Southwest could have accommodated Deltas current schedule of
five flights without unduly interfering with its own operating schedule.
RESPONSE: Southwest admits that it was operating 149 peak day flights on its
Love Field gates as of November 5, 2014, but remarks that it had published a schedule with
153 peak day flights on 16 gates. Southwest admits that, as of November 5, 2014, it had not
yet published its 180-flight schedule for sale to the public.
Southwest admits that
Southwest operating 10 flights per gate per day on its Love Field gates is full utilization of
those gates.
Southwest denies that the concept of a snapshot date for determining
accommodation requests has any support in law or policy. Southwest denies the remaining
146.
In September or October of 2014, Southwest reached an agreement with United to
sublease Uniteds two leased gates at Love Field. The Lease Agreements require the City to
consent to any sublease at Love Field. Delta strenuously objected to this subleaseand to the
Citys consenting to
the
subleaseas inconsistent with
Deltas right
to
long-term
accommodation at Love Field. Moreover, the DOT advised the City that it was opposed to the
City consenting to the sublease before Delta was permanently accommodated.
however, believed it was entitled to dominate Love Field.
Southwest,
After extensive pressure and
downright bullying from Southwest, including threats to relocate corporate resources, the City
ultimately provided its written consent to the United-Southwest sublease on January 28, 2015,
thereby allowing the sublease to go into effect and granting Southwest lease or sublease rights at
all but two of Love Fields 20 gates.
RESPONSE: Southwest admits that it entered into a sublease with United in
October of 2014, admits that the Citys consent is required for any sublease of gates at
PAGE 64
Love Field to become effective, and admits that the City consented to its sublease with
United on or about January 28, 2015. Southwest lacks knowledge or information sufficient
to admit or deny the allegations in the third sentence of paragraph 146. Southwest denies
the remaining allegations of paragraph 146.
147.
Delta reiterated its request for accommodation from Southwest of its current
schedule of five flights in writing on February 23, 2015. Also on February 23, 2015, Delta
requested accommodation from Southwest for eight additional flights. As of February 23, 2015,
Southwest had an announced future schedule beginning in April 2015 of up to 166 daily
departures out of its 18 Love Field gates. Southwest has consistently taken the position that it is
possible to operate at least 10 departures per day out of each Love Field gate, which is consistent
with its operations at its hubs around the country.
Accordingly, on February 23, 2015,
Southwest could have accommodated both Deltas current schedule of five flights and also
Deltas request for eight additional flights without unduly interfering with its own operating
schedule.
RESPONSE: Southwest admits that Delta sought Love Field gate access on
February 23, 2015, including requesting space for an additional eight (8) flights for which it
had not previously sought access. Southwest admits that Southwest operating 10 flights
per gate per day on its Love Field gates is full utilization of those gates. Southwest admits
that on February 23, 2015, it had announced an expanded schedule of 166 flights beginning
in April, and that it had not yet published its 180-flight schedule for sale to the public.
148.
Delta has made multiple offers to Southwest containing reasonable terms for its
requested accommodation on a long-term basisall of them consistent with the guidelines

PAGE 65
articulated in the DOTs letters and the Citys Competition Plan. At each juncture, Southwest
rejected these terms and instead conditioned its willingness to accommodate Delta at Love Field
on a long-term basis on Deltas agreeing to give Southwest gate space at other airports or pay an
exorbitant fee. These terms disregarded the DOTs letters and were wholly unreasonable. To
date, Southwest has failed to offer long-term accommodation to Delta or offer to accommodate
Deltas requests in a manner consistent with Southwests obligations under the Lease
Agreement.
149.
It is not just historical flight-schedule data that establishes Southwests ability to
accommodate Delta.
Southwest has also admitted that it can accommodate Deltas current
schedule of five flights without unduly interfering with its operating schedule. As noted above,
before the City filed this lawsuit, Southwest offered to accommodate Delta at Love Field on a
long-term basis, albeit on a set of wholly unreasonable terms. Southwest could not and would
not have made this offer unless it were possible for Southwest to accommodate Deltas current
schedule of five flights without unduly interfering with its own operating schedule.
150.
Southwests recent conduct also confirms that it can accommodate Deltas current
schedule of five flights without unduly interfering with its own operating schedule. Southwest
has claimed it is not possible to operate more than 10 flights per day out of each Love Field gate.
On August 9, 2015, Southwest began operating 10 flights per day out of the 18 gates that it
leases or subleases at Love Field.
Yet Southwest recently agreed to allow Delta to use
Southwests gates to operate five flights a day until the earlier of September 30, 2015 or the date
the Court issues an order granting injunctive relief. If it truly were impossible to operate more
PAGE 66
than 10 flights per day out of a Love Field gate without unduly interfering with Southwests
operating schedule, Southwest could not and would not have made this agreement with Delta.
Counterclaims and/or Crossclaims
Claim I:
Declaratory Judgment that the Sublease Violated the Lease Agreements
(Against Southwest and United).
151.
and in paragraphs 1-85 of Deltas counterclaim against the City as though fully set forth in this
Crossclaim I.
152.
There exists a justiciable case or controversy between Delta and Southwest as to
whether Southwest violated the Lease Agreements when it entered into a sublease that gave it an
exclusive right to Love Field and defeated Deltas accommodation rights.
153.
There exists a justiciable case or controversy between Delta and United as to
whether United violated the Lease Agreements when it subleased gates to Southwest despite the
fact that doing so would defeat Deltas accommodation rights and give Southwest an exclusive
right to Love Field.
154.

155.
Both Southwest and United were obligated under Section 14.03 of their Lease
Agreements to comply with all applicable laws, specifically including the federal grant
PAGE 67
assurances. Entry of the sublease with United was, and caused, a violation of federal law and the
federal grant assurances, primarily Grant Assurance 23 and 49 U.S.C. 40103(e). Moreover, the
refusal to accommodate Delta was a violation of Grant Assurances 22 and 23 and 49 U.S.C.
40103(e), as well as a violation of Section 4.06(F) of the Lease Agreements.
156.
The only way to remedy the exclusive rights violation caused by the sublease is to
declare that Southwest must divest two gates, limiting its control over Love Field to 80% of the
available gates as contemplated in the Lease Agreement and Five Party Agreement. As the DOJ
has recognized, permitting Southwest to have 18 of the 20 gates would destroy meaningful
157.
Because Southwest and United allocated the risk of forced accommodation to
Southwest through the sublease provision requiring that any accommodation be done on gates
other than those subleased from United, a proper remedy is for Southwest to divest two of its
other gates. Pursuant to Section 4.06(E), the two gates should become Common Use Gates
under the control of the City.
158.
In the alternative, the sublease was wrongful and should be rescinded. Delta will
then be entitled to accommodation at the gates controlled by United because United could have
accommodated Delta without undue interference to its operating schedule when Delta requested
accommodation.

PAGE 68
159.
Accordingly, Delta seeks a declaration under 28 U.S.C. 2201 that Southwest
may not have lease or sublease rights to more than 16 gates, and that the City must reclaim two
Love Field gates to be utilized as common use gates. Alternatively, Delta seeks a declaration
under 28 U.S.C. 2201 that the United-Southwest sublease is void, that United retains control of
those two gates, and that United has an obligation to accommodate Delta at Love Field under the
terms set forth in the United Lease Agreement and the DOTs letters.
RESPONSE: Southwest admits that the Delta seeks the relief requested, but denies
Claim II:
160.
Declaratory Judgment that Delta Is Entitled To Be Accommodated (Against

Southwest)
Counterclaim II.
161.
There exists a justiciable case or controversy between Delta and Southwest as to
whether Southwest is required to accommodate Delta at Love Field.

162.

163.
The Lease Agreement requires Southwest to accommodate Delta at Love Field.

PAGE 69
164.
Southwests failure to accommodate Delta at Love Field has caused, and if not
corrected will continue to cause, Delta to suffer injury.

165.
Delta seeks a declaration under 22 U.S.C. 2201 that Southwest has an obligation
to accommodate Delta at Love Field under the terms set forth in the Southwest Lease Agreement
and the DOTs letters.
RESPONSE: Southwest admits that Delta seeks the relief requested, but denies that
Delta is entitled to any relief.
Claim III:
166.
Breach of the Southwest Lease Agreement (Against Southwest)

Counterclaim III.
167.
The Southwest Lease Agreement between the City and Southwest is a valid,
enforceable contract.
168.
As a new entrant to Love Field (and/or a carrier seeking to provide service at
Love Field and/or a signatory to a gate use license agreement), Delta is an intended,
contemplated, and/or third-party beneficiary of the Southwest Lease Agreement. As such, Delta
is a proper party to sue for breach of the Southwest Lease Agreement.
169.
By seeking to provide service at Love Field (and/or enter Love Field as a new
entrant carrier) and requesting voluntary accommodation from Southwest, Delta performed its
PAGE 70
obligations under the Southwest Lease Agreement and satisfied every condition precedent under
the contract to trigger Southwests obligation to accommodate Delta.
170.
In addition, or in the alternative, the Southwest Lease Agreement is in writing,
states the essential terms of the agreement between Delta and Southwest, promises that
Southwest will provide Delta with a benefit if Delta performs, and was executed on behalf of
Southwest. Accordingly, the Lease Agreement is a valid and enforceable unilateral contract
between Delta and Southwest.
171.
Delta formed a contract with Southwest by performing under the Southwest Lease
Agreement.
Delta performed under the Southwest Lease Agreement by seeking to provide
service at Love Field (and/or enter Love Field as a new entrant carrier) and requesting voluntary
accommodation from Southwest.
As a party to the unilateral Southwest Lease Agreement
contract, Delta is a proper party to sue for breach of the unilateral Southwest Lease Agreement
contract.
172.
Southwest breached the Southwest Lease Agreementincluding, without
limitation, the provisions of section 4.06by failing to provide long-term accommodation to

Delta at Love Field on reasonable terms even though Southwest could do so without undue
interference to its own operating schedule.
173.
Southwest further breached the Southwest Lease Agreementsincluding, without
limitation, the provisions of section 14.03by entering into a sublease with United that violated,
PAGE 71
and/or caused a violation of, federal law (49 U.S.C. 40103(e)) and the federal grant assurances,
particularly grant assurance 23.
174.
Southwests breaches of the Southwest Lease Agreement have caused, and if not
corrected will continue to cause, Delta to suffer significant and irreparable injury as a natural,
probable, and foreseeable consequence.
175.
There is no adequate remedy at law for Southwests breaches of the Southwest
Lease Agreement, and damages would be inadequate compensation. Delta has performed its
obligations under the Southwest Lease Agreement. Accordingly, Delta is entitled to specific
performance by Southwest of the Southwest Lease Agreement.
Claim IV: Breach of the United Lease Agreement (Against United)
176.
Counterclaim IV.
177.
The United Lease Agreement between the City and United is a valid, enforceable
contract.
178.

PAGE 72
contemplated, and/or third-party beneficiary of the United Lease Agreement. As such, Delta is a
proper party to sue for breach of the United Lease Agreement.
179.
entrant carrier) and requesting voluntary accommodation from United, Delta performed its
obligations under the United Lease Agreement and satisfied every condition precedent under the
contract to trigger Uniteds obligation to accommodate Delta.
180.
In addition, or in the alternative, the United Lease Agreement is in writing, states
the essential terms of the agreement between Delta and United, promises that United will provide
Delta with a benefit if Delta performs, and was executed on behalf of United. Accordingly, the
United Lease Agreement is a valid and enforceable unilateral contract between Delta and United.
181.
Delta formed a contract with United by performing under the United Lease
Agreement. Delta performed under the United Lease Agreement by seeking to provide service at
Love Field (and/or enter Love Field as a new entrant carrier) and requesting voluntary
accommodation from United.
As a party to the unilateral United Lease Agreement contract,
Delta is a proper party to sue for breach of the unilateral United Lease Agreement contract.
182.
United breached the United Lease Agreementincluding, without limitation, the
provisions of section 4.06by failing to provide long-term accommodation to Delta at Love

Field on reasonable terms even though United could do so without undue interference to its own
operating schedule.
PAGE 73

183.
Southwest.
United also breached the United Lease Agreement by subleasing its two gates to
By providing Southwest its 17th and 18th gates, that sublease conferred on
Southwest an exclusive right in violation of the United Lease Agreement as well as grant
assurance 23, which implements 49 U.S.C. 40103(e).
The United-Southwest sublease is
therefore void, and United retains control of its two gates, along with the ability to accommodate
Delta.
184.
Uniteds breaches of the United Lease Agreement have caused, and if not
corrected will continue to cause, Delta to suffer significant and irreparable injury as a natural,
probable, and foreseeable consequence.
185.
There is no adequate remedy at law for Uniteds breaches of the United Lease
Agreement, and damages would be inadequate compensation.

obligations under the United Lease Agreement.
Delta has performed its
Accordingly, Delta is entitled to specific
performance by United of the United Lease Agreement.

Claim V:
186.
Tortious Interference with the United Lease Agreement (Against Southwest)

Counterclaim IV.

PAGE 74
187.
The United Lease Agreement between the City and United is a valid, enforceable
contract.
188.
contemplated, and/or third-party beneficiary of the United Lease Agreement. As such, Delta is a
proper party to sue for tortious interference with the United Lease Agreement.
189.
In addition, or in the alternative, the Southwest Lease Agreement is in writing,
states the essential terms of the agreement between Delta and Southwest, promises that
Southwest will provide Delta with a benefit if Delta performs, and was executed on behalf of
Southwest.
Accordingly, the Lease Agreement is a valid and enforceable unilateral contract
between Delta and Southwest.

190.
Delta formed a contract with Southwest by performing under the Southwest Lease
Agreement. Delta performed under the Southwest Lease Agreement by seeking to provide
service at Love Field (and/or enter Love Field as a new entrant carrier) and requesting voluntary
accommodation from Southwest.
As a party to the unilateral Southwest Lease Agreement
contract, Delta is a proper party to sue for tortious interference with the United Lease
Agreement.
191.
entrant carrier) and requesting voluntary accommodation from United, Delta performed its
PAGE 75
obligations under the United Lease Agreement and satisfied every condition precedent under the
contract to trigger Uniteds obligation to accommodate Delta.
192.
Southwest willfully and intentionally interfered with the United Lease Agreement
by knowingly inducing United to breach its obligations under the United Lease Agreement,
including but not limited to Uniteds obligations to accommodate Delta and refrain from
conferring an exclusive right on Southwest. Southwest intentionally induced United to sublease
two gates to Southwest, knowing that Uniteds performance of its sublease agreement with
Southwest would be contrary to and in violation of the United Lease Agreement.
193.
Southwests interference proximately caused Delta to suffer significant and
irreparable injury as a natural, probable, and foreseeable consequence. Southwest took an active
part in persuading United to breach the United Lease Agreement by, among other things,
offering an obscene amount of money for the sublease. This large sum of money reflected the
extraordinary premium Southwest was willing to pay to crush competition and obtain a
monopoly at Love Field.
194.
Deltas significant and irreparable injury stems from not only the profits it would
have made had it been accommodated but also the continuing financial and reputational harm it
will face if it cannot operate flights at Love Field in the future.

PAGE 76
ANSWER TO DELTAS PRAYER FOR RELIEF

Southwest admits that Delta seeks the relief requested, but denies that Delta is entitled to
any relief.
ANSWER TO CONCLUSION
Southwest admits that Delta seeks the relief requested, but denies that Delta is entitled to
any relief.
AFFIRMATIVE AND OTHER DEFENSES
1.
Deltas claims are barred, in whole or in part, by the doctrine of merger.
2.
Deltas claims are barred, in whole or in part, by Deltas unclean hands.
3.
Deltas claims are barred, in whole or in part, by the doctrine of estoppel.
4.
Deltas claims are barred, in whole or in part, by the doctrine of waiver.
5.
Deltas claims are barred, in whole or in part, by the doctrine of ratification.

CONCLUSION AND PRAYER
For these reasons, Southwest requests that the Court enter judgment for Southwest on all
Deltas claims and order that Delta take nothing by its claims, that the Court award Southwest its
reasonable and necessary attorneys fees and costs, and award Southwest such other and further
relief at law or equity to which it may be justly entitled.

PAGE 77
DATED: September 22, 2015
Respectfully submitted,
/s/ Stephen M. Cole

John T. Cox III
Texas Bar No. 24003722
Email: tcox@lynnllp.com
Kent D. Krabill
Email: kkrabill@lynnllp.com
Britta Erin Stanton
Email: bstanton@lynnllp.com
Stephen M. Cole
Email: scole@lynnllp.com
LYNN TILLOTSON PINKER & COX, LLP
2100 Ross Avenue, Suite 2700
Dallas, TX 75201
Telephone: 214.981.3800
Facsimile: 214.981.3839
ATTORNEYS FOR DEFENDANT
SOUTHWEST AIRLINES CO.
CERTIFICATE OF SERVICE
The undersigned hereby certifies that on September 22, 2015, the foregoing document
was served on all counsel of record through the Courts ECF system.
/s/ Stephen M. Cole

Stephen M. Cole
4813-1900-0872, v. 2

PAGE 78

Southwest Response Filed Sept 22

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Case 3:15-cv-02069-K Document 189 Filed 09/22/15

Page 1 of 78 PageID 5047

UNITED STATES DISTRICT COURT

Civil Action No. 3:15-cv-02069-K

DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED

DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED COUNTERCLAIMS

Case 3:15-cv-02069-K Document 189 Filed 09/22/15

Page 2 of 78 PageID 5048

Southwest denies Deltas contention that the relevant focus for

competition in the Dallas-Fort Worth market is competition at individual airports, as

Southwest, too, publicly professes to value competition. In the August copy of

Case 3:15-cv-02069-K Document 189 Filed 09/22/15

Page 3 of 78 PageID 5049

Southwest denies Deltas contention that the relevant focus for

competition in the Dallas-Fort Worth market is competition at individual airports, as

DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED COUNTERCLAIMS

Case 3:15-cv-02069-K Document 189 Filed 09/22/15

Page 4 of 78 PageID 5050

Southwest denies the remaining

United both had space available when Delta requested accommodation.

But rather than risk

DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED COUNTERCLAIMS

Case 3:15-cv-02069-K Document 189 Filed 09/22/15

Page 5 of 78 PageID 5051

With the benefit of a federal government declaration that

DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED COUNTERCLAIMS

Case 3:15-cv-02069-K Document 189 Filed 09/22/15

Page 6 of 78 PageID 5052

RESPONSE: Southwest lacks knowledge or information sufficient to admit or deny

DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED COUNTERCLAIMS

Case 3:15-cv-02069-K Document 189 Filed 09/22/15

Page 7 of 78 PageID 5053

The Federal Aviation Administration (FAA) has now launched an investigation

DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED COUNTERCLAIMS

Case 3:15-cv-02069-K Document 189 Filed 09/22/15

Page 8 of 78 PageID 5054

Although there is no question that Southwests scheme to unlawfully expand its

DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED COUNTERCLAIMS

Case 3:15-cv-02069-K Document 189 Filed 09/22/15

Page 9 of 78 PageID 5055

Counter-Plaintiff Delta Air Lines, Inc. is a Delaware corporation whose principal

Counter-Defendant City of Dallas is a municipal corporation located in Dallas

DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED COUNTERCLAIMS

Case 3:15-cv-02069-K Document 189 Filed 09/22/15

Page 10 of 78 PageID 5056

ANSWER TO JURISDICTION AND VENUE

under the laws of the United States.

Venue in this Court is proper under 28 U.S.C. 1391(b)(2) because a substantial

DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED COUNTERCLAIMS

Case 3:15-cv-02069-K Document 189 Filed 09/22/15

Page 11 of 78 PageID 5057

ANSWER TO BACKGROUND AND FACTS

Federal Regulation of Federally Funded Airports

authority over federally funded airports (such as Dallas Love Field).

http://www.faa.gov/airports/aip/grant_assurances/), but remarks that the application of the

DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED COUNTERCLAIMS

Case 3:15-cv-02069-K Document 189 Filed 09/22/15

Page 12 of 78 PageID 5058

Southwest lacks knowledge or information

sufficient to form a belief as to the remaining allegations of Paragraph 23.

Grant assurance 22a, which implements 49 U.S.C. 47107(a)(1), requires the

DEFENDANT SOUTHWEST AIRLINES CO.S ANSWER TO DELTAS AMENDED COUNTERCLAIMS

Case 3:15-cv-02069-K Document 189 Filed 09/22/15

Page 13 of 78 PageID 5059

Southwest admits that grant assurance 23 provides that airport

Southwest denies the remaining allegations of

FAA PFC Assurances (2007), Item 5.