In 1980, the Wright Amendment went into effect, restricting the range of flights from Love Field, an airport in North Dallas. This law was widely seen as an anti-competitive act in favor of the Dallas-Fort Worth Airport, to restrain service from Love Field.
While Southwest Airlines flew under Wright Amendment restrictions from the main terminal at Love Field, another group of upstarts – the Love Terminal Partners (LTP) – invested in the Lemmon Avenue Terminal, a separate, six-gate facility at Love Field. With widespread demands by the public to repeal or greatly modify the Wright Amendment, LTP invested millions of dollars in expanding its terminal in anticipation of future business.
In 2006, when Congress passed a Wright Amendment Reform Act (WARA), it eased the restrictions on Love Field, but sanctioned a government leveling of competition.
The act codified a “Five-Party Agreement” between the cities of Dallas and Fort Worth, the Dallas-Fort Worth Airport Authority, and Southwest and American airlines, mandated the reduction of Love Field’s 32 gates to 20, with six gates of the reduction to come from the Lemmon Avenue Terminal.
The Lemmon Avenue Terminal only had six gates. The law explicitly required the taking and demolition of the terminal – the legislated destruction of a business.
The Judicial Record
Once the Lemmon Avenue Terminal had been demolished, LTP and its partner, Virginia Aerospace, sued in 2009, seeking their constitutional right to just compensation.
On April 19, 2016, a Federal Claims Court awarded plaintiffs $133.5 million for the regulatory and physical taking of their property.
The court held that Wright Amendment Reform Act limited the use of the plaintiffs’ leasehold, stripping it of economic value.
The court also found that the case met the “categorical” definition of a taking under Lucas v. South Carolina Coastal, and a physical taking under Penn Central Transportation Co. v. New York City – the two touchstone precedents in the case law on takings.
The US Court of Appeals for the Federal Circuit, however, overturned this ruling on May 7, 2018. He found no regulatory taking under Penn Central, no “categorical” taking under Lucas, and no physical taking under the 2006 law.
In response, the LTP plaintiffs filed a petition of certiorari on Feb. 11, 2019, seeking a review of the Circuit Court’s ruling by the United States Supreme Court.
TIMELINE OF THE CASE
1989: The Wright Amendment goes into effect, restricting long-haul passenger service from Love Field in the heart of North Dallas to promote the growth of the more distant Dallas/Fort Worth International Airport.
1999: Love Terminal Partners (LTP) pays millions of dollars to be assigned an existing sublease for a 9.3-acre portion of the city’s Master Lease of Love Field with the intention of offering passenger service with Legend Airlines.
2000: LTP invests $17 million constructing the state-of-the-art Lemmon Avenue Terminal for passenger service. This new six-gate terminal is in addition to the 26 gates of Love’s main terminal. Legend Airlines begins flying out of the Lemmon Avenue Terminal.
Located near the Lemmon Avenue side of the airport, the terminal is outfitted with facilities designed to cater to the burgeoning luxury regional jet market, as well as an adjacent parking lot.
December, 2000: Legend suspends its flights due to predatory pricing and soaring fuel costs.
Post-Sept. 11, 2001: The industry recession caused by the terrorist attacks leads most of the nation’s largest airlines to file for bankruptcy over the next three years.
2003: Sensing that opinion is moving against the anti-competitive Wright Amendment, the partners invest $6.5 million to acquire the entire 26.8-acre area around the Lemmon Avenue Terminal available under the Master Lease.
2004: Southwest Airlines launches a popular “Wright is Wrong” campaign against the Wright Amendment.
July 11, 2006: Under a Congressional mandate, the cities of Dallas and Fort Worth join with Southwest and American Airlines and the Dallas-Forth Worth Airport Authority to agree on a “local solution.” The investors of the Lemmon Avenue Terminal are not included.
This “Five-Party Agreement” states that the parties would petition Congress to relax the restrictions on Love Field and repeal the Wright Amendment in eight years.
It also calls for a reduction in Love Field’s 36 gates to 20, including the elimination of all six gates of the Lemmon Avenue Terminal. October, 2006: Congress enacts the Wright Amendment Reform Act (WARA), implementing the terms of the Five-Party Agreement.
April 2008: Deprived of their property, the Lemmon Avenue Terminal investors stop paying rent to Dallas. Dallas institutes eviction proceedings. LTP and Virginia Aerospace later file suit in Federal Claims Court over the regulatory taking of its sublease by WARA and the physical taking of the Lemmon Avenue Terminal.
September, 2009: Dallas completes the demolition of the Lemmon Avenue Terminal.
Feb. 11, 2011: The Claims Court rules for the plaintiffs in Love Terminal Partners v. United States. The court concludes that WARA effected a physical taking of the Lemmon Avenue Terminal.
April 19, 2016: The Claims Court holds a new trial on the remaining takings claims, including testimony from nine experts, thousands of pages of documents, and a site visit to the doomed terminal. Judge Margaret Sweeney relies on the “categorical theory” of Lucas v. South Carolina Coastal, 505 U.S. 1003 (1992), and the takings analysis of Penn Central Transportation Co. v. New York City (1978) to award plaintiffs $133.5 million for the regulatory and physical taking of their property.
May 7, 2018: The Federal Circuit of Appeals overturns the Claims Court ruling. The court also finds no regulatory taking under Penn Central, no “categorical” taking under Lucas, and no physical taking under WARA.
Feb. 11, 2019: LTP plaintiffs file a petition of certiorari before the United States Supreme Court seeking a review of The Federal Circuit Court's ruling.
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