Buchalter's Aviation Group Wins Major Victory in Ninth Circuit

On November 1, 2017, the United States Court of Appeals for the Ninth Circuit handed down a sweeping victory for Buchalter’s client Bonner County, owner and operator of Sandpoint Airport in Sandpoint, Idaho.
 
The airport was sued in 2012 by real estate developer SilverWing at Sandpoint, LLC for actions the county took in order to achieve compliance with federal aviation regulations and specific safety directives from the Federal Aviation Administration.  SilverWing sought tens of millions of dollars in damages under 42 U.S.C. § 1983 for alleged inverse condemnation and violation of equal protection in addition to a state law claim for breach of the covenant of good faith and fair dealing arising from a “through-the-fence” access agreement.
 
After prevailing on summary judgment in the U.S. District Court for the District of Idaho, Buchalter’s Aviation Practice Group, led by attorneys Barbara Lichman and Paul Fraidenburgh, won a complete victory in the Ninth Circuit on every issue across the board, including the affirmance of an attorney fee and cost award totaling almost $800,000 (which is likely to increase after appellate fees and costs are added).
 
With respect to the preempted state law claim, the Ninth Circuit held: 

“The FAA preempts the fields of ‘aviation safety,’ Montalvo v. Spirit Airlines, 508 F.3d 464, 468 (9th Cir. 2007), and ‘aircraft operations,’ Burbank-Glendale-Pasadena Airport Auth. v. City of Los Angeles, 979 F.2d 1338, 1340 (9th Cir. 1992). When the County’s airport was found to be in noncompliance by the FAA, due to specific safety and operations concerns with SilverWing’s development, the FAA required the County to implement a Corrective Action Plan (“CAP”). The CAP included limiting future residential access to the airport and pursuing alternatives to the current ‘through-the-fence’ arrangements, which allowed airplanes to access the municipal airport from SilverWing’s land. It was not the County which frustrated SilverWing’s plans; it was the FAA. Thus, SilverWing’s claim is preempted.”

Likewise, the court affirmed the dismissal of the claims under 42 U.S.C. § 1983, explaining:
“SilverWing’s claims under 42 U.S.C. § 1983 fail. Although the County, in voting to submit a new Airport Layout Plan (“ALP”) to the FAA, took official action to ensure the airport’s compliance with federal law, the ‘moving force’ behind the action was the FAA’s requirement that the County change the airport’s ALP. Thus, the challenged conduct was not pursuant to any County ‘policy or custom’ and cannot serve as the basis for a § 1983 lawsuit. See Monell v. Dep’t of Soc. Servs., 436 U.S. 658, 694 (1978).
Finally, the court affirmed the substantial award of attorney fees and costs, stating:
“The district court did not abuse its discretion by awarding Rule 54(d)(1) costs and attorney’s fees to the County. The County is a ‘prevailing party’ within the meaning of Rule 54(d)(1) because it obtained a judgment with respect to all of SilverWing’s claims except the one ultimately remanded to state court. San Diego Police Officers’ Ass’n v. San Diego City Emps. Ret. Sys., 568 F.3d 725, 741 (9th Cir. 2009). As such, it is entitled to costs unless SilverWing can show why a cost award would be ‘inappropriate or inequitable.’ Ass’n of Mexican-Am. Educators v. California, 231 F.3d 572, 591 (9th Cir. 2000) (en banc). No such showing has been made here. Furthermore, the ‘through-the-fence’ agreement between the parties provided that attorney’s fees were to be awarded to the party deserving of costs in any action brought ‘to enforce’ the agreement. Because the § 1983 claims were brought, at least in part, to enforce the ‘through-the-fence’ agreement, it was not error for the court to award fees also for those claims.
 
Paul Fraidenburgh, who successfully argued the case in the Ninth Circuit on behalf of the airport, commented on the decision: “This is a significant victory not just for Sandpoint Airport but for all public airports in the United States because it confirms that a federally-regulated airport cannot be held liable for actions taken to achieve compliance with federal law.  Section 1983 cannot be used as an end-run around that rule.  Municipalities are insulated from liability under Section 1983 when their actions are motivated by a desire to achieve compliance with federal law rather than a local policy or custom.  The Ninth Circuit correctly decided each of these issues and upheld our substantial fee award.  We are thrilled to have won yet another significant victory for our long-time friends and clients in Bonner County, as well as for airports across the country.”