(CN) - A Delta-led coalition cannot advance claims that U.S. Export-Import Bank policies that help foreign airlines get cheap loans hurt U.S. airlines and their workers, a federal judge ruled.
The Export-Import Bank is the United States' official export credit agency, whose main role is to promote U.S. exports by giving loans to foreign buyers of U.S. goods and services.
The Export-Import Bank Act of 1945, which sets guidelines for the bank's financing decisions, was slated to expire in September 2014, but Congress has extended it through June 30, 2015.
Delta Air Lines, Hawaiian Airlines and the Air Line Pilots Association, filed three different lawsuits challenging the bank's policies, which, they claimed, gave foreign airlines a competitive advantage over domestic ones.
While the bank's loans to foreign airlines help U.S. aircraft manufacturers sell their planes, they create unfair competition for U.S. airlines, the coalition claimed in the complaints.
A previous lawsuit filed by Delta in 2011, and later joined by ALPA and the Air Transport Association of America, was dismissed after a D.C. federal judge concluded that the bank's decision to guarantee $6.3 billion in loans for Air India's purchase of Boeing aircraft was neither arbitrary nor capricious.
The D.C. Circuit reversed, asking the bank to explain the basis of its exclusion of aircraft transactions from detailed economic impact analysis, known as the exportable goods screen.
In November 2012, the bank adopted new guidelines, which no longer excluded transactions resulting in the foreign provision of services, such as airline services, from in-depth economic impact analysis. The guidelines, which took effect in April 2013, are still the governing rules today.
Delta, Hawaiian and ALPA challenged the validity of the bank's aircraft-specific procedures in a February 2013 lawsuit. Since the revised guidelines were not yet in effect, that lawsuit challenged only the facial validity of the procedures, and not any specific financial decision.
The coalition claimed the revised procedures and guidelines violated the Bank Act and the Administrative Procedure Act, and asked the court to vacate them.
U.S. District Judge Rudolph Contreras dismissed those claims Monday, noting they were not ripe for judicial review. The court cannot determine the effect of a rule that has not yet been applied, the judge said.
Moreover, the airlines failed to establish an imminent injury resulting from the bank's adoption of the new guidelines, which were not yet in effect when the plaintiffs filed the lawsuit, according to the 36-page ruling.
Contreras found that "plaintiffs can offer facts that only demonstrate market conditions historically and generally, not any particularized and concrete competitive harms that have resulted or imminently will result from a specific financing commitment made by the bank under the new EIPs [economic impact procedures], as no such commitments existed. These market conditions suggest only hypothetical risks that may or may not materialize depending on when, how, and to whom the bank applies the 2013 EIPs and guidelines for a future financing decision; consequently, they 'do not get [plaintiffs] all the way there.'"
Even if the airlines could show an imminent increase in competition due to the revised procedures, they cannot prove the type of harm required for claims under the Bank Act, the March 30 ruling states.