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Victory for Los Angeles and LAX in Challenge to Airport’s Labor Peace Requirement

Scott Lewis, Dave Mackey and Jessica Wall, as co-lead counsel for the City of Los Angeles, have helped the City successfully defend a challenge to licensing conditions at LAX requiring airline service providers to enter into union “labor peace” agreements at the Airport.  On August 23, 2017, the U.S. Court of Appeals for the Ninth Circuit affirmed a decision by the U.S. District Court for the Central District of California rejecting claims by airlines and service providers that the City’s rule violates federal aviation and labor law.  A copy of the Court’s opinion can be found here: http://cdn.ca9.uscourts.gov/datastore/opinions/2017/08/23/15-55571.pdf.

In its decision, the Ninth Circuit agreed that the City can lawfully require airline service providers to enter into labor peace agreements at LAX.  These businesses refuel and load planes, take baggage and tickets, help disabled passengers, and perform other tasks for the airlines.  The City’s “labor peace” rule is intended to avoid labor disruptions at LAX.  The Ninth Circuit recognized that the operation of publicly-owned airports is “inherently competitive” and held that in imposing its labor peace requirement, the City was acting as an airport proprietor and market participant, rather than as a regulator.  The decision reaffirms an airport’s proprietor’s ability to impose licensing conditions that are designed ensure smooth and efficient airport operations that will attract passengers and air service.

While the Ninth Circuit granted leave to amend the complaint, the plaintiffs have signaled that they cannot cure their pleading, but instead may petition for review by the United States Supreme Court.  In seeking rehearing, they have characterized the Court of Appeals’ decision as one of “exceptional importance” which presents questions that arise regularly throughout the country.  Their petition for rehearing is now pending before the Ninth Circuit.

Questions regarding this decision may be directed to Scott Lewis or Dave Mackey.

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