During the week of August 19, 2019, both the Appellate and Supreme Courts of California issued decisive opinions clarifying the parameters of agency action subject to environmental review under the California Environmental Quality Act, Cal. Pub. Res. Code § 21000, et seq., (“CEQA”). The courts were responding to repeated efforts by public entities to circumvent their CEQA obligations by redefining the actions that constitute a “project” subject to analysis under CEQA. Those public entities which have attempted to so minimize their exposure under CEQA include several airports in California, most notably, Los Angeles International Airport (“LAX”). In its environmental review of the Specific Plan Amendment Study of several years ago, LAX relied on precisely the Project Definition soundly rejected by the California courts as set forth below.
On June 21, 2019, the Supreme Court, in a decision by Chief Justice John Roberts, chose to overrule a lower Appellate Court and almost a century of precedent which purportedly required property owners whose property is “taken” by state or local government agencies, either through regulation or physical incursion, to go through local and state legal processes before turning to the federal courts for relief under the Fifth Amendment to the United States Constitution.
Under the new ruling in Knick v. Township of Scott, Pennsylvania, 588 U.S. ___ (2019), the court majority (consisting of Roberts, Alito, Gorsuch, Thomas and Kavanaugh) ruled that property owners may bring Fifth Amendment claims for compensation as soon as their property has been taken, “regardless of any post-taking remedies that may be available to the property owner,” citing Jacobs v. United States, 290 U.S. 13, 17 (1933), under state or local law.
The Fifth Amendment to the United States Constitution states categorically “nor shall private property be taken for public use, without just compensation.” The devil, of course, is in the definitions. The Supreme Court has broadened its interpretation of the term “taking” over the years, from “physical occupation of property,” Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982); to regulation that comes close to physical occupation by conditioning the grant of a government approval upon a relinquishment of some or all of property interest, e.g., an easement, over real property, Nollan v. California Coastal Commission, 483 U.S. 825 (1987); to a regulation that deprives property of all of its economically viable use, Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992).
The dissent, however, chose to agree with the lower court and to rely on precedent purportedly establishing that: “‘[A] Fifth Amendment claim is premature until it is clear that the Government has both taken property and denied just compensation’ (emphasis in original)). If the government has not done both, no constitutional violation has happened.” See, e.g., Horne v. Department of Agriculture, 569 U.S. 513, 525-26 (2013).
Based on the assertion that no taking has occurred if the possibility of compensation still exists, the dissent proceeds to the second question: “At what point has the government denied a property owner just compensation, so as to complete a Fifth Amendment violation?” Knick, supra, 588 U.S. at p. 3. The dissent found the answer in Williamson County Regional Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), in which the court found that the property owner had improperly sued a local planning commission in federal court under 42 U.S.C. § 1983 for an alleged taking, before availing itself of available state law remedies.
The Knick majority firmly rejected the dissent’s position.
In a June 19, 2019 hearing of the United States House of Representatives Subcommittee on Aviation, representatives of pilots’ organizations directly involved in, and affected by, the structural issues identified in the Boeing’s 737 Max aircraft, that caused the tragic deaths of 346 passengers, called The Boeing Company (“Boeing”), and its federal regulatory partner, the Federal Aviation Administration (“FAA”) to account in no uncertain terms.
Daniel Carey, a 35 year career American Airlines Captain, and President of the Allied Pilots Association (“APA”), testified as to what pilots regard as the fundamental issues with oversight by FAA.
Carey opines that the disasters arose from two fundamental problems: (1) the addition of the Maneuvering Characteristics Augmentation System (“MCAS”) without additional training, or even notification to pilots of its existence; and (2) failure of the requisite oversight by FAA. First, in an effort “to minimize the operating costs to Boeings customers by allowing the Max to be certified by FAA as a 737,” rather than requiring additional procedures that might be required for a substantial variation from the original 737 design, “this lead Boeing’s engineers to add the MCAS system.” Also according to Carey, many additional mistakes were subsequently made by Boeing engineers.
The concept of “on call” transportation has now moved from the Earth to the sky. As demonstrated recently at a meeting of the players in Washington, D.C., the future of aerial transportation is transitioning toward “flying cars,” i.e., electric Vertical Takeoff and Landing (eVTOL) craft that hover and glide relatively quietly and without emissions, summoned by “app,” and without the need for a pilot. To accomplish this purpose, companies including Embraer, Aurora Aircraft, Karem Aircraft, Pipistrel USA Engineering, and Bell Aircraft Corporation have launched development of requisite engines and airframes.
In order to achieve the fundamental purpose of this (hopefully) revolutionary mode of air transportation, a number of parameters must be met in developing the requisite airframe, including a cruise speed of 150 miles per hour, 60 mile range, and capacity sufficient to fly three hours’ worth of short (e.g., 25 miles) trips carrying a pilot and four passengers. In addition, the “aircraft” must be able to takeoff and land vertically, like a helicopter, but fly on wings to conserve energy.
Each of the aspiring companies touts a different concept to accomplish these purposes.
In a March 27, 2019 appearance before the Senate Subcommittee on Aviation and Space, Daniel K. Elwell, Acting Administrator for the Federal Aviation Administration (“FAA”) sought to clarify the FAA’s role in the certification of the safety of aircraft systems. In doing so, he emphasized that the principal responsibility for safety lies with the aircraft manufacturers, with FAA performing merely a review function to determine “if the applicant [for certification] has shown that the overall design meets the safety standards. We do that by reviewing data and by conducting risk based evaluations of the applicant’s work,” Statement of Administrator, before the Senate Committee on Commerce, Science and Transportation, Subcommittee on Aviation and Space on the State of Airline Safety: Federal Oversight of Commercial Aviation, March 27, 2019 (“Statement”). The problem with this explanation may not be the adopted approach, but the lapses in FAA’s realization of its part of the bargain.
In the opening discussion of the safety certification system’s underlying philosophy, the Acting Administrator explained that “the FAA focuses its efforts on areas that present the highest risk within the system . . .,” Statement, p. 3, with FAA purportedly “involved in testing and certification of new and novel features and technologies,” Statement, p. 5, a category within which the Maneuvering Characteristics Augmentation System (“MCAS”), thought to be a cause of the recent accidents in Ethiopia and Malaysia is included. In fact, as discussed in a comprehensive article of March 17, 2019, “Flawed analysis, failed oversight: How Boeing, FAA certified the suspect 737 MAX flight control system,” posted in the Seattle Times by Dominic Gates, the Seattle Times Aerospace reporter (“Seattle Times Article”), Boeing’s “system safety analysis” of the MCAS:
Understated the power of the new flight control system, which was designed to swivel the horizontal tail to push the nose of the plane down to avert a stall. When the planes later entered service, MCAS was capable of moving the tail more than four times farther than was stated in the initial safety analysis document.
Failed to account for how the system could reset itself each time a pilot responded, thereby missing the potential impact of the system repeatedly pushing the airplane’s nose downward.
Assessed a failure of the system as one level below “catastrophic.” But even that “hazardous” danger level should have precluded activation of the system based on input from a single sensor — and yet that’s how it was designed.
Nevertheless, the Acting Administrator goes on to divest FAA of responsibility.
Thirty-one airports throughout the State of California, including Los Angeles International Airport and San Bernardino International Airport, have been made the subject of new investigative orders pursuant to California Water Code § 13267. These airports, with training/fire response facilities will be required to prepare and submit work plans for review and approval by the State Water Quality Control Board (“SWQCB”) for the testing of ground water for Per Fluoroalkyl substances (“PFAS”). A summary of the study created by Steve Figgins of EKI Environment & Water of Irvine, California setting forth the SWQCB Study Phases and Targets for each phase can be found here. Note that airports and landfills are to be sampled in phase 1. It is important that the relevant time frames be achieved to avoid penalties under the applicable statutes.
In recent months, since the tragic crashes of two Boeing 737-Max aircraft in disparate areas of the globe, both the public and the press have expressed surprise at the finding that the Federal Aviation Administration (“FAA”) was delegating to the aircraft manufacturing industry the principal responsibility for formal certification of aircraft safety. They shouldn’t have been so surprised.
The press consistently blames “agency capture,” the process by which federal agencies purportedly develop cooperative, and even symbiotic, relationships with the industries they are tasked with regulating. In fact, in this instance, it was the United States Congress, in Section 312 of the FAA Modernization and Reform Act of 2012 (“FMRA”), that opened the door to the now questioned delegation of authority over aircraft safety.
Within hours after FAA’s grounding of Boeing’s 737 Max 8 and 9 aircraft, pilots and aviation experts began to weigh in on the rationale. The first in the chorus was the Acting Administrator, Daniel Elwell, who opined that, in the face of the immediate action to ground the aircraft taken by European aviation authorities, as well as the increasing public outcry, the FAA had discovered “new evidence” from the site of the recent deadly airline crash in Ethiopia that justified defiance of the aeronautical industry urging a more measured approach.
Specifically, the Acting Administrator, in an interview with CNBC, stated that information made available since March 13 verified that the Ethiopian airline’s flight track “was close enough to the track of the Lion Air flight” that had crashed in Indonesia in October 2018 “to warrant the grounding of the airplanes so that we could get more information from the black boxes and determine if there is a link between the two, and, if there is, to find a fix to that link.” Ultimately, the agency concluded “the full track of the Ethiopian flight was very close to Lion Air,” and, thus, justified the grounding. The remaining question of what potentially caused the similar fatal incidence was, however, left up to other aviation experts.
On February 26, 2019, the Idaho Supreme Court issued a unanimous decision in favor of Buchalter’s client, Bonner County, owner and operator of Sandpoint Airport in Idaho.
In an action originally seeking tens of millions of dollars against the County, the state’s high court held that the County had fully performed the promises that SilverWing at Sandpoint, LLC (the plaintiff) alleged the County had made, and on that basis reversed the trial court’s order denying the County’s Motion for Judgment Notwithstanding the Verdict on SilverWing’s claim of promissory estoppel. The Supreme Court explained: “By the time of trial, the County fully performed the promises that SilverWing alleges were made; those promises were never broken.”
The County was sued in 2012 by real estate developer SilverWing 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, arguing the County frustrated SilverWing’s plans of building a “hangar-home” development adjacent to the airport. The County responded that as the operator of a federally-regulated airport, the County had no power to deviate from FAA mandates.
After the County obtained summary judgment on 3 out of 4 claims in the federal district court (and successfully defended that judgment in the Ninth Circuit Court of Appeals), the case was remanded back to the state court for trial on the fourth cause of action, promissory estoppel. After a five-day jury trial in Sandpoint, the jury returned a verdict awarding SilverWing only $250k (which was less than 1% of SilverWing’s claimed damages).
The County filed a Motion for judgment notwithstanding the verdict (JNOV), arguing that “breach” is a required element of promissory estoppel and that the evidence at trial demonstrated that the County had fulfilled all of the alleged promises. The trial court denied the County’s motion for JNOV, and the County appealed that decision to the Idaho Supreme Court. The Idaho Supreme Court agreed that Bonner County had fulfilled all of its promises to SilverWing, reversed the trial court’s order denying JNOV and vacated the judgment. This was the final chapter in a complete victory for the County, which has already collected $741,730.06 from SilverWing in fees and costs arising from the County’s successful defense of the federal court litigation.
Buchalter Shareholder Paul Fraidenburgh, the aviation attorney who successfully argued the case in the Idaho Supreme Court on behalf of the airport, commented on the decision: “Five out of five justices of the Idaho Supreme Court agree that the County fulfilled all of its alleged promises and that the County is entitled to judgment as a matter of law. We are thrilled to have won yet another significant victory for this public airport.”
The Idaho Supreme Court’s Opinion can be found here: Published Opinion
As the popularity of unmanned aircraft systems (“UAS” or “drones”) increases, expanding to such hybrid uses as local air taxi services, the Federal Aviation Administration (“FAA”) has been faced with pressure to loosen existing restrictions on drone operation. The FAA’s initial regulation, 14 C.F.R. Part 107, in essence, gave with one hand while taking away with the other, by prohibiting drone operations under a variety of different circumstances, including a prohibition on operation over people, 14 C.F.R. § 107.39, prohibition on night operations, 14 C.F.R. 107.29, and prohibition on flights over moving vehicles, 14 C.F.R. § 107.25, while providing, at the same time, a process for obtaining waivers of those prohibitions, 14 C.F.R. § 107.200. In its Notice of Proposed Rulemaking (“NPRM”), RIN 2120-AK85, FAA now proposes to allow operations over people and at night without the need for waivers, if the UAS meet certain preliminary standards, and the remote pilot in command conducts the activity pursuant to the proposed rule.