City of Santa Monica on Track for Confrontation with Federal Aviation Administration

Predictably, the Federal Aviation Administration (“FAA”) has weighed in strongly in opposition to the City of Santa Monica’s (“City”) plan to close the Santa Monica Airport (“Airport”) within the next two years.  The City, owner and operator of the Airport, plans to begin the process of closure, including cancellation and/or modification of leases held by various aeronautical service providers, such as providers of fuel, maintenance and hangar storage.  Those Airport incumbents are already paying rent on a month-to-month basis, subject to summary eviction. 

 

The apparent basis of Santa Monica’s position is that: (1) its obligation to maintain the airport is based solely on the terms of its contract with FAA for the provision of funding; and (2) according to its terms, that contract expires 20 years after the FAA’s last grant of funding.
 
The FAA’s position, obviously, differs dramatically.  The agency claims that, according to the terms of a $240,000 federal grant to the City in 2003, the City is obligated to keep the Airport open until at least 2023, see, e.g., FAA Order 5190.6B, Chapter 4, §§ 4.6.h(1) and (2).  Moreover, the FAA asserts that, under the terms of the transfer agreement governing the transfer of the airport property from the military back to the City after World War II, the City is obligated to keep the Airport open in perpetuity.
 

FAA’s position is not unanticipated, as we pointed out in our blog of February 20, 2014.  In the first instance, it is common knowledge among airport operators that the United States Congress has attached to the acceptance of federal funds responsibilities to consumers of the improvements made with those funds.  See, e.g., 49 U.S.C. § 47107(a)(1)-(6), implemented by Grant Assurance 22 which requires, in turn, that the operator of a federally obligated airport “make [its] 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.” See R-T 182, LLC v. Federal Aviation Administration, 519 F.3d 307, 309 (6th Cir. 2008).   

Moreover, while federal fund obligations normally last for the useful life of the facilities, or 20 years, after the grant of the funding, there are notable exceptions.  In addition to the exception that requires that real property purchased with federal funds be used for airport purposes in perpetuity, FAA Order 5190.6B, Chapter 4, §§ 4.6.h(2), there is also the parallel requirement that property transferred from the military pursuant to a surplus property agreement also be used for airport purposes indefinitely.  Both of these conditions apply in the case of the Airport, and both moot the “20 year” escape route relied upon by the City.  
 
Finally, the City plans to oppose, through legal action, FAA’s determination to stop the closure.  The City may be disappointed, however, when it arrives as it plans to do, in Federal District Court.  This is because the United States Congress, in the Federal Aviation Act, 49 U.S.C. § 40101, et seq., requires that any challenge to an FAA order be brought in a Federal Circuit Court of Appeals, either the Circuit in which the project is located, in this case the Ninth Circuit, or in the D.C. Circuit Court of Appeals.  See 49 U.S.C. § 46110(a).  Doubtlessly, City will argue that FAA’s effort to stop the closure is not the sort of agency action that falls within the strictures of that section of the statute.  That contest is inevitable, but the outcome for Santa Monica Airport is far from certain.  Stay tuned. 
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