The Sheppard Mullin Aviation Team is a national practice of recognized attorneys in the area of aviation law. Our aviation attorneys have extensive experience representing domestic and international airlines, public and private sector aircraft manufacturers, aircraft financiers, aircraft parts distributors, charter operators, airport authorities, fixed base operators and aircraft maintenance and service providers.
Our interdisciplinary team approach to addressing legal issues facing the aviation industry enables us to identify and efficiently address significant matters impacting our clients. Our aviation team is comprised of attorneys who have a deep understanding of the aviation industry and are equally knowledgeable in the areas of litigation, tax, transactions, securities, environmental law, insurance, insolvency, labor, real estate and land use regulatory compliance in the aviation sector. Each of our aviation lawyers is focused on the particular business goals of our clients.
Regulatory
Sheppard Mullin’s aviation team handles matters before the Department of Transportation, the Federal Aviation Administration, the Transportation Security Administration and the National Transportation Safety Board, in all types of regulatory proceedings. Our experience before the Department of Transportation and Federal Aviation Administration includes user fees, overflight fees, crash investigations, pilot citations, licensing, code sharing, aircraft registration and noise compliance. Our Aviation Team also handles enforcement or certificate actions involving air carriers, repair stations, fixed base operators, engine management companies and air-taxi/commuter services.
Airport and Government User Fees on Airlines
A mainstay of Sheppard Mullin’s aviation law practice is its more than sixteen years of experience representing airlines and their trade associations in administrative proceedings and federal and state court cases challenging user fees and other charges imposed by national and local governments and airport authorities.
In 2007, the Firm served as lead trial counsel for seven U.S. airlines challenging millions of dollars in new airport terminal charges at Los Angeles International Airport. The U.S. Department of Transportation, on June 15, 2007, ruled that the new charges unjustly discriminated against the air carriers and ordered the airport to refund all of the unlawful fees. Alaska Airlines, Inc. et al. v. Los Angeles World Airports, et al., Docket No. OST-2007-27331 ("LAX III"), Final Decision, Order 2007-6-8 (available at http://www.Regulations.gov). The ruling sets important legal precedent, provides critical protections to air carriers against unjust discrimination by airports, and should result in more than 100 million dollars in refunds and cost savings to the affected airlines at LAX. The case is highlighted in "A Tale of Two Airports: Why DOT Found Unjust Discrimination Against Airlines at LAX But Not at Newark," Issues in Aviation Law and Policy ¶ 20,431 (October 2007).
The Firm also represented the same seven U.S. Airlines in the multiple challenges to the DOT LAX III decision filed in the U.S. Court of Appeals for the D.C. Circuit. In August 2009, the D.C. Circuit issued its decision, affirming important aspects of the DOT decision and remanding other issues to the agency. Alaska Airlines, Inc. v. DOT, 575 F.3d 750 (D.C. Cir. 2009). Among other things, the Court agreed with the complainant airlines that DOT had improperly failed to explain why LAX could use fair market value to set terminal charges but not airfield fees. The Court also agreed with the airlines that LAX’s monopoly power was relevant to the issue of whether LAX’s terminal charges were lawful.
Sheppard Mullin represented several airlines in a D.C. Circuit Court challenge to the imposition by the U.S. Transportation and Security Administration of hundreds of millions of dollars in additional "Aviation Security Infrastructure Fees" ("ASIF") for screening passengers and property at U.S. airports. In February 2009, the Court held that the fee increase was unlawful because the TSA improperly included the cost of screening non-passengers in its calculations for the cost increase. Southwest Airlines Co. v. Transportation Security Admin., 554 F.3d 1065 (D.C. Cir. 2009). (The matter is now on remand before the TSA.)
The Firm represented the Air Transport Association and several major airlines in administrative litigation before the DOT and in federal court litigation challenging landing fee surcharges imposed by a local governmental entity (Tinicum Township) at Philadelphia International Airport. In March 2008, the DOT granted the ATA’s petition for an order declaring that the landing fees violate the Anti-Head Tax Act because the township does not own or operate the airport. The Firm represented ATA as an intervenor in the township’s appeal of the DOT decision, and in September 2009, the U.S. Court of Appeals for the Third Circuit denied the township’s appeal. Township of Tinicum v. DOT, 582 F.3d 482 (3rd Cir. 2009).
Our Firm has defended major U.S. airlines in class actions alleging that the carriers improperly collected Mexican tourist taxes from exempt passengers. In January 2010 the U.S. Court of Appeals for the Ninth Circuit affirmed the ruling of a federal court in San Francisco which had dismissed the class action complaint challenging improper collection of the tax. McMullen v. Delta Air Lines, Inc., 2010 WL 55526 (January 5, 2010).
In 2009, we successfully represented a major Latin American airline sued in a class action for allegedly failing to comply with requirements for notifying passengers of their rights after being involuntarily denied boarding.
On multiple occasions we successfully pursued cases on behalf of a coalition of international airlines that challenged air traffic control user fees imposed by the U.S. Federal Aviation Administration on flights that do not take off or land in the U.S. ("overflights"). E.g., Air Transport Association of Canada v. FAA, 323 F.3d 1093(D.C. Cir. April 8, 2003). These cases resulted in refunds of several millions of dollars plus cost savings in the hundreds of millions of dollars for the international aviation community. We also played an important role in successfully challenging the same type of user fees in 1998. Asiana Airlines v. FAA, 134 F.3d 393(D.C. Cir. 1998). Our experience in these cases is detailed in the Spring 2006 edition of the Journal of Air Law and Commerce in an article entitled "Will it Happen Again? — FAA’s Disastrous Prior Experience with User Fees."
In 2009, the Firm represented the National Airline Council of Canada in negotiations with the FAA over FAA’s plans to increase the overflight fees.
In 2006 and 2009, the Firm represented the Air Transport Association of Canada in challenging the U.S. Department of Agriculture’s attempt to increase the fees charged for inspection of aircraft entering the United States for compliance with the U.S. laws regarding agricultural products.
We also represented an airline challenging passenger facility charges imposed by the airports in Minneapolis-St. Paul and Memphis. Northwest Airlines, Inc. v. FAA, 14 F.3d 64 (D.C. Cir. 1994).
We routinely represent DHL Express in negotiating leases and user agreements for on-airport facilities at most major airports throughout the United States.
Government Contracts
Sheppard Mullin has decades of experience representing entities in the transportation sector and other industries in administrative and judicial challenges to federal and state agency decisions, rulemakings and investigations.
Our premier government contracts attorneys are experienced in government contract issues and disputes. We have successfully advocated our client’s position on a variety of challenges, including cost and cost accounting challenges and audits, termination claims and bid protests, prime and subcontract disputes, as well as civil and criminal False Claims Act litigation.
Sheppard Mullin has deep and broad capability conducting assessments of corporate compliance programs intended to satisfy required statutory and regulatory mandates. We have a sizeable background in performing internal investigations related to possible violations of federal statutes and regulations.
U.S. Customs and Immigration
Sheppard Mullin has experience handling U.S. customs and immigration problems relating to passengers and cargo.
Our attorneys have worked with ICE (Immigration and Customs Enforcement) and other various governmental agencies including Los Angeles World Airports and the Director of Security at San Francisco International Airport.
Aircraft Finance, Leasing, and Insolvency
Sheppard Mullin’s Aviation Team has extensive experience in aircraft financing transactions, including the representation of leasing companies, banks and air carriers in such financings and in airline insolvencies in the United States and Brazil. Our attorneys are also experienced in representing borrowers, leasing companies, banks and other lenders in equipment leasing, project finance, acquisition financing, letters of credit, financing restructures and asserting and pursuing creditors’ rights in airline insolvencies. We recently completed a leveraged lease transaction involving the sale and leaseback of $72 million in airport related equipment. These transactions draw upon the expertise of our finance, real estate, tax, bankruptcy, federal regulatory, securities and litigation attorneys.
Sheppard Mullin has been involved in some of the largest and most complex aircraft sale and purchase transactions in the industry, representing both sellers and purchasers, in both domestic and cross-border situations. We have significant experience in the broad range of lease transactions, financings and tax and regulatory matters associated with these complex transactions.
Bankruptcy and Creditors’ Rights
Bankruptcy and business restructuring is a critical component of Sheppard Mullin’s practice. We have the resources to respond to the time sensitivity of financial crises and the depth to provide whatever size team is required. We regularly draw on all of the resources necessary to solve the multi-disciplinary problems presented by complex insolvencies and business restructuring endeavors, including real estate, intellectual property, tax, labor, securities and mergers and acquisitions.
We represent clients in all types of regional, national and international insolvency matters, from out-of-court workouts and financial restructurings to bankruptcy proceedings, creditors’ rights and distressed acquisitions, including such proceedings in the airline industry. Our clients have included secured lenders, debtors, bank groups, creditors’ committees, indenture trustees, equity holders, real property and equipment lessors, bankruptcy trustees and buyers, among others.
Our attorneys have been involved in most of the major U.S. airline chapter 11 cases where we have represented major institutional financers and lessors in such cases as Delta, Northwest, Continental, TWA, Tower, and Pan Am (I and II). In these cases, our attorneys have represented the interests of various institutions including ING Lease, TIAA-CREF, foreign airlines, and U.S. Bank as substantial creditors. We have also represented DHL and airlines as creditors in bankruptcy matters and provided bankruptcy counseling to American Airlines and Blue Panorama Airlines as a creditor in Delta Airlines’ bankruptcy, as well as representing creditors in the Varig insolvency cases and the Fairchild Donier cases.
Antitrust & Competition
Our EU team in Brussels has more than 25 years’ of experience representing players in the aviation industry, including airlines, airline caterers, aircraft lessors, Computer Reservation Systems companies, and global travel agencies. We have advised our aviation clients on cartels, follow-on litigation, mergers, State aid, compliance issues as well as on any EU aviation regulatory issues, including the following:
EU Aviation Regulatory
EU regulatory advice to non EU and EU airlines on:
- Open Skies agreements
- Community designation clauses, horizontal agreements
- Passenger Rights – including compensation for denied boarding
- Safety issues, regulation of the safety assessment of third country aircraft using Community airports
- Frequent flyer programmes
- Ground-handling services
- Slots allocations
- Noise limitations regulations
National Aviation Regulatory
EU Member States law advice to non-EU and EU airlines on:
- Obtaining traffic rights
- Frequent flyer programs
- Restructuring of the Brussels airport managing body
- Advising on the setting up and running of operations of a non EU airline in Belgium
- Corporate
- Tax
- Labor law issues (employment issues regarding pilots and flight crews)
- Post-September 11 measures (security controls and compliance of additional requirements with EU law)
Competition Investigations (Cartels)
- Representing a leading global travel management company in connection with the Commission’s investigation into airline ticket distribution
- Acting for a major airline in the EU air cargo investigation prior to the issuance of a Statement of Objections by the European Commission
- Defending an Asian airline against a Statement of Objections issued by the European Commission in the EU air cargo investigation, and successfully leading to the abandonment of the case
- Successful rejection of a damages action in an airline contribution proceedings against another airline before the UK courts
- Ongoing representation of an Asian airline in a separate standalone damages action in the UK
- Acting for an Asian airline in the EU SkyTeam alliance investigation
- Advised an aerospace company on competition and IP issues raised by R&D cooperation agreements between French aerospace industry members
- Represented an airline carrier in the EU Commission’s price fixing investigation in the air cargo sector. The Commission’s investigation was part of a global investigation by various competition authorities into alleged price fixing, by more than 40 airlines, of fuel surcharges in the airfreight sector. A decision was issued in November 2010 in which the Commission fined 11 airlines worldwide €800 million. Following our successful defence strategy, our client was not found guilty and was consequently not fined in the EU, unlike many of the other airlines
- Represented an airline carrier to protect them against the disclosure of confidential information in the context of private antitrust litigation in the UK. Dealing simultaneously with the European Commission and the UK High Court to enforce certain confidentiality claims. These issues arise out of El Al’s involvement in the Commission’s air freight investigation
- Assisted a Greek airport in a European Commission investigation in relation to its charges and an alleged discrimination between domestic and non-domestic flights
Merger Control
Advised a major airline manufacturer and a global airline passenger service provider with:
- joint venture to build a satellite constellation expected to provide global internet broadband service to individual consumers, including multi-jurisdictional merger filing analysis
- high profile worldwide merger operation in the aviation and travel industry under the merger rules of the EU, US and elsewhere
- foreign multi-jurisdictional merger filings in relation to a billion dollar merger with another airline
- contemplated acquisition of a competing catering kitchen operation active in the UK, Europe and Asia by a the world's largest independent provider of airline catering
- acquisition of the in-flight catering unit of an Amsterdam service
- acquisition of supplier of on-board flight equipment including cutlery, trays, amenity blankets
- completed acquisition including the supply of onboard (air and rail) retail point of sale payment facilities for airline and rail customers
- advising a leading global consultancy and major corporate airline customer, as an interested third party in relation to various airline mergers
- advising on privatisation process and its satellite capacity distribution policy
State Aid
Assisted airlines, airline manufacturers and satellite operators with:
- financing the development of a new product whereby State aid issues are also involved
- drafting an aid regime to compensate the losses incurred as a result of the closure of the Brussels airport due to the terrorist attacks of 22 March 2016
- EU investigation and discussion for an alternative State measure which would not constitute aid
- State aid issues raised by the development of broadband networks
- privatisation process (air transport, ground handling and aircraft maintenance), from the design of the process to its notification and approval by the Commission
Compliance
- Advised a global lessor of aircrafts in relation to a competition compliance workshop to the company’s European management, sales and business development teams at their European headquarters.
