# Petition for Writ of Certiorari — City & County of San Francisco v. Federal Aviation Administration > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_2200%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1992 - **Citation:** 503 U.S. 983 ## Text me a, | Surrame Coit tS B a ( () FF t , | ; - 1) Bk © be 0 7 i | No. 91- DEC 49 199t ; Oficr oF THE GiEx | IN THE oul anal Supreme Court of the Gnited States OcTOBER TERM, 1991 Ciry AND CouNTY OF SAN FRANCISCO and THE AIRPORTS COMMISSION OF THE Ciry AND COUNTY OF SAN FRANCISCO, Petitioners, Ns U.S. FEDERAL AVIATION ADMINISTRATION, BARRY Harris, ACTING ADMINISTRATOR, FEDERAL AVIATION ADMINISTRATION, and JAMES B. Busey IV, ACTING SECRETARY OF TRANSPORTATION, Respondents. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT Of Counsel: LOUISE H. RENNE STEVEN S. ROSENTHAL* City Attorney HAROLD J. MCELHINNY DONALD J. GARIBALDI JONATHAN BAND Airports General Counsel MORRISON & FOERSTER CRAIG M. MCCABE 2000 Pennsylvania Ave., N.W. Deputy City Attorney Suite 5500 San Francisc) Intl. Airport Washington, D.C. 20006 San Francisco, CA 94126 (202) 887-1500 (415) 876-2236 Attorneys for Petitioners *Counsel of Record Dated: December 19, 1991 PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203 QUESTIONS PRESENTED 1. Whether a state or local agency, by accepting federal grant funds under statutes and regulations that are silent on the issue, subjects its otherwise final adjudicatory determinations to de novo review and redetermination by the Federal agency that ad- ministers the grant program. 2. Whether an airport proprietor has the authority to adopt a long-noticed deadline on the admission of additional noisy aircraft when it has a reasonable or rational basis for concluding that the deadline would decrease the noise of airport operations. il TABLE OF CONTENTS OPINIONS AND ORDERS BELOW ...........c.cccceeeeeeees JURISDICTION wccrcssccscessscnsssnsssannencssssssansnasssanasannsqnnse CONSTITUTIONAL AND STATUTORY PROVISIONS ENVOL VED cccscccscsssssccassssccsesosessssnnenaccasssnsesenansanéaceses STATEMENT OF THE CASE. ............ccccccesereseseeceees A. San Francisco’s 1978 Noise Abatement TROIRTIOR | os csccsiannccacsatnnbinentensneonitmensasvenens B. The Burlington Waiver Application to Op- EO ¢ F. erate Q707 Aircraft at SFIA ....... The Airport Grant Program and the San Francisco Airport Grants ............ccsceseeees The FAA Enforcement Action ............... The Opinions of the ALJ and of the FAA PGT OIE «ic sincisscinantedanabiasintaiaenaganeie The Opinion of the Court of Appeals .... REASONS FOR GRANTING THE WRIT .................45 A. The Question of Whether a Federal Gran- B. tee Can be Found in Default Under Its Grants on the Basis of a Redetermination of Its Otherwise Final Adjudicatory De- terminations, Where the Grant Statutes and Regulations are Silent on the Issue, Implicates Important Issues of Federal- ism and of Limits on the Spending Power and Should Be Decided By This Court .. The Scope of Airport Proprietor Power to Control Noise From Airport Opera- tions Is of Great Public Importance and Only This Court Can Resolve the Conflict “ the Lower Courts on the Scope of This QUOT nenensnsninecsatianteniaaiaamaals CONCLUSION .cccsnssscsanssnssnsssnessaiasunanencaspenasasnansyneabias APPENDIX A Opinion of the United States Court of Appeals for the Ninth Circuit (August 21, DGBT) .nainnnasctsdnsakonessiaucncencinaiennanaelaaenienaal 17 23 30 la iii APPENDIX B Order Denying Rehearing, Sugges- tion for Rehearing En Banc, and an Extension of Time (November 12, 1991) ............ccccc eee APPENDIX C Administrator’s Decision and Finai Order of Noncompliance & Default (December SUNT III TiNiddiish ub bhtesdbdesetsnusssoscessienacnbacssccbesasicons APPENDIX D Initial Decision of Chief Adminis- trative Law Judge Kane (August 9, 1988) ..... APPENDIX E Order Denying Application for Grant Funds (December 12, 1988) ...............c..ceseeeeees APPENDIX F FAA Order on Reconsideration a cceaeumnebans APPENDIX G San Francisco Airports Commission Denial of Burlington Air Application (April 15, TTA lelbatuadibabunvsnavehidsbsinebasasénaceceasaceesaevenccne APPENDIX H San Francisco Airports Commission Noise Abatement Regulation (May 17, 1978) . APPENDIX I Excerpts from Brief of Petitioner City and County of San Francisco (March 1, ITI cic ddaneuabidsndbbseheediancanbundensocnssnciasen 25a 28a 58a 97a TABLE OF AUTHORITIES CASES: Page Air Transport Ass’n of Am. v. Crotti, 389 F. ~_ Be OUD cctecesecsssoinsinicitintiannisnedninnpnciiten 23 Alaska Airlines v. City of Long Beach, Nos. 88- 67745, 89-55278 (Sth Cir. October 24, SITET. siesissinscieannssiadsanchadiniinsbadinientdesiepbibannintednnnens 16,26,28 Arrow Air, Inc. v. Port Auth. of N.Y., 602 F. Supp. BS Sc Ts SIDE saiiactncensnqnscnnbeneinccatiaiinsniceinn 23,24 Baker v. Burbank-Giendale-Pasadena Airport Au- thority, 39 Cal. 3d 862, 218 Cal. Rptr. 293, 705 P.2d 866 (1985), cert. denied, 475 U.S. 1017 EIT ssnnuindnisheksonudbeinieshasudinidetanesaananibaminihenmdenainnetes 5,24 Bieneman v. Vity of Chicago, 864 F.2d 463, (7th Cir. 1988), cert. denied, 490 U.S. 1080 EATITE. sthuintshssdanakdehsmncseesunsiaspabbanatnnsadedbiiediiantakunss 25 British Airways Bd. v. Port Auth. of N.Y. & N.J., fs & TF ge Re , , Pen 23 British Airways Bd. v. Port Auth. of N.Y. & N.J., 564 F.2d 1002 (2d Cir. 1977) ..................0000000 23 City and County of San Francisco v. Engen, 819 ee RD Se Gs, BD ctaictsicnancateinscdianincie 10 City and County of San Francisco v. Municipal Court, 141 Cal. App. 3d 470, 190 Cal. Rptr. Ne EE snikisiccnencadnecnastsdastinteaiiadbitiidsuiiantantnntede 5 City of Burbank v. Lockheex Air Terminal, 411 U.S. EE SITET catcisnissbisicncassacdndietdndgabbiinniinniuntiatasians 23,25,26 City of New Orleans v. Dukes, 427 U.S. 297 TTD Sensnleuihasiciaunsitacacentasnnsassitapnaunaasbenheltthitninneaininases 15,27 Global Int’l Airways Corp. v. Port Auth. of N.Y. & N.J., 727 F.2d 246 (2d Cir. 1984), reh’g de- nied, 731 F.2d 127 (2d Cir. 1984) .................. 23,24 Global Int’l Airways Corp. v. Port Auth. of N.Y. & N.J., 731 F.2d 127 (2d Cir. 1984) .............. 23 Table of Authorities Continued Page Greater Westchester Homeowners Ass’n v. City of Los Angeles, 26 Cal. 3d 86, 160 Cal. Rptr. 733, 603 P.2d 1329 (1979), cert. denied, 449 U.S. SD CED winacasacechscocecscienkaaebatiieansasanminmueanitaia 5,24,25 Gregory v. Ashcroft, 111 S.Ct. 2395 (1991) ........... 20 Grove City College v. Bell, 465 U.S. 555 (1984) .... 19 Guardians Association v. Civil Service Commission of the City of New York, 463 U.S. 582 CRIED Kcarnisccsacsncinninndiinascssiasiplasiisetniddanlsmmiaan 19 Hanover Tp. v. Town of Morristown, 108 N.J. Super. 461, 261 A.2d 692 (1969) ........0......... 24 Harrison v. Schwartz, 319 Md. 360, 572 A.2d 528 EXE cccnsissacesnsnasanssibanitsakignasiaseueaanaiand 24 Hendrick Hudson District Board of Education v. Rawley, 458 U.S. 176 (1962) ...........00000000000000 19 Huron Portland Cement Co. v. City of Detroit, 362 Cc BGR GEGIED snccsatenstvinsscnsesadmbiasinaan 25 In re Airport Small Claims Actions, Nos. 116824, et al. (Sup. Ct. Marin Co., Oct. 11, 1985) ..... 5 Krueger v. Mitchell, 112 Wis. 2d 88, 101, 332 FW A Ey CD GREOED énsicidansninnemeteaitanvasinn 24 Middlesex County Ethics Comm. v. Garden State Bar Ass'n, 457 U.S. 423 (1982) ..........,.ccccccc00 20 Minnesota v. Clover Leaf Creamery Co., 449 U.S. GD GROG ED ccsisnictasinscncsisnansihisiteasinietasnmbiainanmiciaias 28,29 National Aviation v. City of Hayward, Cal., 418 F. Same. GET GUD. Ci, BGG cicensseracenisnessnessanace 23 Northeast Phoenix Homeowners’ Ass’n v. Scottsdale Municipal Airport, 130 Ariz. 487, 636 P.2d SOD COMED citnschsnnsicchiedecsecieenncrcoaeoe 24 Ohio Civil Rights Comm’n. v. Dayton Christian Sahaele, EFF Wh. GIS Tee ckceastcaacdineiaaas 20 Table of Authorities Continued Owen v. City of Atlanta, 157 Ga. App. 365, 277 S.E.2d 338, aff'd, 248 Ga. 299, 282 S.E.2d 906 (1981), cert. denied, 456 U.S. 972 (1982) ....... Pennhurst State School and Hospital v. Halderman, GBA UE. “3 CED enecrinnsinctbenncssnintntneenianianniinns People v. Sims, 32 Cal. 3d, 468, 186 Cal. Rptr. 77, GER FSG Ge CER enckisensescsetininieeamnnstaaicanicns Pike v. Bruce Church, Inc., 397, U.S. 137 (1970) . Pirolo v. City of Clearwater, 711 F.2d 1006 (11th CaP. BED ceaseciesenecsecssseusnmnieueseiliaindisiinionlinuiiatnins Rosenbalm Aviation, Inc. v. Port Auth. of N.Y. & N.J., 636 F. Supp. 212 (S.D.N.Y. 1986) ........ Santa Monica Airport Ass'n City of Santa Monica, GES F.2d 100 (Sth Cir. 196]}) ...ccccccccccccccscccesess School Board of Nassau County v. Airline, 480 U.S. BER CREE) cersssesverecsssstunianninsinenapiedatinadienden South Dakota v. Dole, 483 U.S. 203 (1987) ........... United States v. Carolene Products Co., 304 U.S. EGBG GRO tcccertccinincicssiiniatiibaiiaddeaaintntieandia University of Tennessee v. Elliott, 478 U.S. 788 (RBGED ccvessevstinsuntessenseninniennanansiianaeaamnaiaa Ursin v. New Orleans Aviation Bd., 506 So.2d 947 ee SS GS ee Vance v. Bradley, 440 U.S. 93 (1979) ................0.. Western Air Lines v. Port Auth. of N.Y. & N.J., 658 F. Supp. 952 (2d Cir. 1987), aff'd 817 F.2d 222 (S.D.N.Y. 1986) cert. denied sub nom., Delta Air Lines v. Port Auth. of N.Y. & N.J., GS UE. BESS Glee wcnicncnseneneneietans Will v. Michigan Dept. of State Police, 109 S.Ct. TOBE CINUE ccenerasenisneaetacn aaa eee Williamson v. Lee Optical of Oklahoma, Inc., 348 U.S. 483 (1955) ......... seussinheiiaiaillaesgacnnatnaeasanaaiiine Page 24 19 18 29 23,24 23 24,26 19 19 28 20 24 28 15,26 vii Table of Authorities Continued Statutes and Regulations: GD TRAC. BOGE cncesecscrsccssescencessese seeinbindahecieaiiciias GD DERG. BED ~ cecnenrsecnnetencsenspcsnsnnscvscnsenentsnnmsesccven: GD CDRS. BRET cncsccstecsssssccsvnctsersisnstccsmnsssistnneeneenmnnse Pe ee QD UBC. app. BUBB ccrrccsrecerccccccessccccsccscescssccccnssosces GD UB. Gap. BUBBBD cncccccccceccnssnccessssccsenscssssscenvens 49 U.S.C. app. 2201 et S€q .........cceseceeeseeceseeeeneeeenes 49 U.S.C. app. SBOBlaN 12) ...............cccccccccccrseseees _ AD UBC. GED. BBG ccrrccccccccccveeccscssecccsccssssescsccccosees 49 U.S.C. app. 220GaNSNB) .................ccccccccsccsereess GD UBC. aap. BRBRIAME) qncccccecrcccsecccccecccescsessenssceses GD UDG. cep, SRRBIT) ancocccccccesscccecsesenecccenscssenes Cal. Civ. Proc. Code § 1094.5 (1980) ..............:.000+ BG GHB TUG BED GRICE) cccrrccccscccscsnccsenisesceinennennee BE Gio TRAE cacecscensctccccsceccescsseunsessvnsencncsscsunnees Other Authorities: H.R. Rep. No. 842, 92d Cong. 2d Sess. (1972) ..... S. Rep. No. 1160, 92d Cong., 2d Sess., reprinted Se . Bt ee ee S. Rep. No. 1353, 90th Cong., 2d Sess., reprinted So gt ht ee 56 Fed. Reg. 48628, 48652 (Sept. 25, 1991) ......... 7] @ FAA No. DEPARTMENT OF TRANSPORTATION, 1386-2 NATIONAL TRANSPORTATION SAFETY BOARD, Respondents. 2a Crry AND COUNTY OF SAN FRANCISCO; THE AIRPORTS COMMISSION OF THE CITY AND CounTy OF SAN FRANCISCO, Petitioners, Vv. FEDERAL AVIATION ADMINISTRATION; DEPARTMENT OF TRANSPORTATION, NATIONAL TRANSPORTATION SAFETY BOARD, Respondents, BURLINGTON AIR EXPRESS (**BURLINGTON’’), Respondent-Intervenor. Crry AND COUNTY OF SAN FRANCISCO; THE AIRPORTS COMMISSION OF THE Crry AND CounTy OF SAN FRANCISCO, Petitioners, Vs FEDERAL AVIATION ADMINISTRATION; DEPARTMENT OF TRANSPORTATION, NATIONAL TRANSPORTATION SAFETY Boarb, Respondents. No. 89-70057 FAA No. 1386-2 . No. 89-70482 FAA No. 1386-2 3a Crry AND CounTy oF SAN FRANCISCO; THE AIRPORTS COMMISSION OF THE CITy AND County OF SAN FRANCISCO, Petitioners, Vv. FEDERAL AVIATION ADMINISTRATION; DEPARTMENT OF TRANSPORTATION, NATIONAL TRANSPORTATION SAFETY BOARD, Respondents. Counry oF SAN MATEO, Petitioner, Vv. FEDERAL AVIATION ADMINISTRATION; DEPARTMENT OF TRANSPORTATION, NATIONAL TRANSPORTATION SAFETY BOARD, Respondents. y, No. 89-70483 FAA No. 1386-2 No. 89-70500 FAA No. 1386-2 Petition to Review a Decision of the Federal Aviation Administration Argued and Submitted November 5, 1990—San Francisco, California Filed August 21, 1991 Before: James R. Browning, Harry Pregerson and Stephen S. Trott, Circuit Judges. Opinion by Judge Browning 4a SUMMARY Administrative Law Affirming in part and reversing in part a decision of the Federal Aviation Administration, the court of appeals held that San Francisco’s ban of certain aircraft from its airport unjustly discriminated against the aircraft in violation of its grant assurance. The FAA denied petitioner City and County of San Fran- CiscO airport improvement grants from the Airport and Air- way Trust Fund. To receive funds, an airport proprietor must Submit a grant application to the Secretary of Transportation assuring the airport to which the project relates will be avail- able for public use on fair and reasonable terms and without unjust discrimination. San Francisco submitted grant applica- uons for fiscal years 1986 through 1989. The FAA rejected the applications on the ground San Francisco had violated the assurance of nondiscrimination by unjustly discriminating against a retrofitted aircraft through a noise abatement resolu- tion. Such regulation prohibited such aircraft from continuing operations at the Airport. An ALJ determined that San Fran- cisco had breached its assurance that it would operate the Air- port without unjust discriminauon. The FAA affirmed. [1] At the outset, the court rejected San Francisco’s conten- tion that the court should decide de novo as a matter of con- tract interpretation whether San Francisco violated its grant assurance. This contention misunderstood the nature of fed- eral regulation of airport noise. [2] The court noted that the federal government regulates aircraft and airspace perva- sively, preempting regulation of aircraft noise by state or local governments. [3] The power delegated to airport proprietors to adopt noise control regulations is limited to regulations that are not unjustly discriminatory. [4] Courts have recognized both the delegation of regulatory power to airport proprietors and the limitation of this power to the issuance of nondiscrim- inatory regulations. [5] Grants must be offered upon terms and conditions the Secretary of Transportation considers nec- essary to meet the requirements of the statute, and a grant application may not be approved unless the Secretary is satis- fied that regulatory and statutory requirements have been met. [6] The court accorded substantial deference to the interpre- tation adopted by the agency charged with administering the statute. Deference was especially appropriate because Con- gress expressly mandated FAA enforcement of the statute by the Secretary, and application of the statute to airport noise regulations requires technical expertise. [7] Here, the FAA approved the ALJ’s holding that because San Francisco’s noise regulation allowed planes that were equally noisy or noisier to operate at the airport and increase in number with- out limit, while exciuding the aircraft at issue based on a char- acteristic that had no bearing on noise, the regulation violated the statutory requirement and grant assurance that the airport would be available without unjust discrimination. [8] The court agreed with the FAA. The central issue was whether San Francisco’s regulation was unjustly discriminatory within the meaning of the statute, and the Second Circuit’s Concorde Cases were sound authority for the conclusion that it was. [9] In this case, use of noise control regulations by an airport pro- prietor to bar aircraft on a basis other than noise, or without a factual basis, was found to be inconsistent with a fair and efficient national air transport system. This test of “unjust discrimination” was a permissible construction of the statu- tory language and the policy it serves. [10] The court rejected San Francisco’s suggestion that a state contract defense could authorize it to adopt a noise regulation prohibited by federal law. [11] San Francisco argued Burlington failed to exhaust its administrative remedies by not seeking a waiver of the 1988 regulation. However, the FAA correctly concluded that such an application would have been futile. [12] In 1987, Congress imposed a 180-day limit on the time the FAA could take to consider airport improvement grant 6a applications. [13] The statutory language is mandatory, leav- ing the FAA no discretion. It compels timely approval or denial of grant applications. [14] The FAA argued the statute did not apply retroactively and so did not compel approval of grants for the years 1986 and 1987. San Francisco agreed, but noted it refiled the grant applications for these years after the statute was amended. The FAA pointed to no bar to refiling applications for previous years. The court therefore held the refiled applications were subject to the 180-day limitation period in the same way as newly filed ones. Therefore, the FAA was directed to approve San Francisco’s applications for those years. [15] It was not an abuse of the district court’s dis- cretion in denying San Mateo County (where the airport is located) more than limited intervenuon. COUNSEL Steven S. Rosenthal, Morrison & Foerster, Washington, D.C., for the petitioners. Porter Goltz, Deputy County Counsel, County of San Mateo, Redwood City, California, for the peti- tioners. John A. Bryson, United States Department of Justice, Wash- ington, D.C., for the respondents. John W. Simpson, Kelley Drye & Warren, Washington, D.C., for the intervenor. Kenneth R. Williams, Deputy Attorney General, and Larry A. Thelen, Department of Transportation, Sacramento, Califor- nia, for the amicus. OPINION BROWNING, Circuit Judge: The City and County of San Francisco petitions for review of a decision of the Federal Aviation Administration (FAA) denying San Francisco’s applications for airport improvement grants from the Airport and Airway Trust Fund. We affirm in part and reverse in part. I The Airport and Airway Trust Fund is made up of amounts equivalent to taxes on aviation fuel and air transportation received by the Treasury. See 26 U.S.C. § 9502 (1988). Money from the Trust Fund is allocated, pursuant to The Air- port and Airway Improvement Act of 1982, 49 U.S.C. app. §§ 2201-27 (1988), to finance the operation and improvement of major airports. Potential recipients include “primary airports” like San Francisco International Airport. See 49 U.S.C. app. §§ 2202(a)(12), 2205(a)(2)(B). To receive funds from the Trust Fund, an airport proprietor must submit a grant application to the Secretary of Transpor- tation assuring the “airport to which the project relates will be available for public use on fair and reasonable terms and with- Out unjust discrimination. ...” 49 U.S.C. app. § 2210(a)(1). San Francisco submitted grant applications for fiscal years 1986 through 1989. The FAA rejected the applications on the ground San Francisco had violated the assurance of nondis- crimination by unjustly discriminating against a retrofitted Boeing 707 airplane (Q707) through a Noise Abatement Res- olution adopted by San Francisco's Airports Commission in 1978 (“1978 Regulation’). The FAA establishes standards for aircraft noise levels through a certification system. See 49 U.S.C. §§ 1423, 1431. Aircraft are certified as Stage 1 (not allowed to operate in the U.S. after 1985), Stage 2, and Stage 3 (most quiet) based on the decibels they emit. See 14 C.F.R. Part 36 (1991). Stage 1 aircraft may be retrofitted to meet Stage 2 standards; the Q707 involved in this case is such a retrofitted Stage | aircraft. San Francisco’s 1978 Regulation prohibited aircraft from continuing operations at the Airport after January 1, 1985 8a unless certified as Stage 2 (or Stage 3) or retrofitted to meet Stage 2 certification requirements. Aircraft like the Q707 that had been retrofitted to meet Stage 2 certification requirements could begin operations at the Airport after January 1, 1985, only if the FAA had certified at least one plane of the same type as meeting Stage 2 requirements before January 1, 1985. Because FAA regulations required Stage 3 certification for new aircraft after November 1975, the practical effect of San Francisco’s regu!ation was that only Stage 3 aircraft and “grandfathered” Stage 2 aircraft were allowed to operate at the Airport after January 1, 1985. Burlington Air Express, an all-cargo carmer, applied to the San Francisco Airports Commission in August 1985 for a waiver of the 1978 Regulation so it could operate several retrofitted Q707s at the Airport. These planes received Stage 2 certfication from the FAA in March 1985, three months after San Francisco’s cutoff date of January 1, 1985. Burling- ton’s waiver application was denied. Since the denial, Bur- lington has operated its Q707s from Oakland Airport across San Francisco Bay. While Burlington’s waiver request was pending before the Commission, Burlington filed a complaint with the FAA. The FAA’s Chief Counsel issued a Notice of Proposed Cease and Desist Order, alleging exclusion of Burlington’s Q707 aircraft was unjustly discriminatory in violation of section 2210(a)(1) and San Francisco’s grant assurance.‘ The notice suspended airport improvement grants to San Francisco. After a hearing, a Department of Transportation Adminis- trative Law Judge held San Francisco had breached its assur- ance that it would operate the Airport without unjust discrimination. The Administrator of the FAA affirmed, hoid- ing the 1978 Regulation unjustly discriminatory because it ‘The Chief Counsel alleged the exclusion violated other statutes, but these charges were laier dismissed. 9a allowed planes that were equally noisy or noisier than Q707s to operate at the Airport and to increase in number without limit while excluding the Q707, based on a characteristic — date of type-certification as meeting Stage 2 requirements — that had no relationship to noise. The FAA denied San Fran- cisco’s grant applications and withheld approval of new grants while the regulation remained in effect. San Francisco petitioned for review in this court. II [1] We reject at the outset San Francisco’s contention we should decide de novo as a matter of contract interpretation whether San Francisco violated its grant assurance. This con- tention misunderstands the nature of federal regulation of air- port noise. It also misunderstands the role of the Airport and Airway Improvement Act, which denies federal funds to air- port proprietors who exceed their regulatory authority by denying use of an airport on an unjustly discriminatory basis. [2] The federal government regulates aircraft and airspace pervasively, preempting regulation of aircraft noise by state or local governments. City of Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624, 633 (1973). However, Congress reserved a limited role for local airport proprietors in regulating noise levels at their airports. See Santa Monica Airport Ass'n v. City of Santa Monica, 659 F.2d 100, 104 (9th Cir. 1981) (“Congress intended that municipal proprietors enact reason- able regulations to establish acceptable noise levels for air- fields and their environs.”); see also City of Burbank, 411 U.S. at 635 n.14.; San Diego Unified Port Dist. v. Gianturco, 651 F.2d 1306, 1316 (9th Cir. 1981). [3] Congress made it clear, however, that the power dele- gated to airport proprietors to adopt noise control regulations is lumited to regulations that are not unjustly discriminatory. When the Federal Aviation Act was amended in 1968 to extend the FAA’s authority to regulate aircraft noise, the Sen- 10a ate Report accompanying the bill quoted with approval a let- ter from the Secretary of Transportation. The letter set forth the existing limited authority of airport proprietors to adopt nondiscriminatory noise regulations and stated that the 1968 amendment would not alter that limited authority: the proposed legislation will not affect the rights of a State or local public agency, as the proprietor of an airport, from issuing regulations or establishing requirements as to the permissible level of noise which can be created by aircraft using the airport. Airport owners acting as proprietors can presently deny the use of their airports to aircraft on the basis of noise considerations so long as such exclusion is nondiscriminatory. S. Rep. No. 1353, 90th Cong., 2d Sess. (1968), reprinted in 1968 U.S. Code Cong. & Admin. News 2688, 2694. [4] Courts have recognized both the delegation of regula- tory power to airport proprietors and the limitation of this power to the issuance of nondiscriminatory regulations. See City of Burbank, 411 U.S. at 635 n.14 (quoting the Secretary of Transportation’s letter); British Airways v. Port Auth. of New York (Concorde I), 558 F.2d 75, 84 (2d Cir. 1977) (a local airport proprietor “is vested only with the power to pro- mulgate reasonable, nonarbitrary and non-discriminatory reg- ulations that establish acceptable noise levels for the airport and its immediate environs”); British Airways v. Port Auth. of New York, 564 F.2d 1002, 1011 (2d Cir. 1977) (Concorde II) (maintaining “a fair and efficient system of air commerce... mandates that each airport operator be circumscribed to the issuance of reasonable, nonarbitrary and nondiscriminatory rules defining the permissible level of noise which can be cre- ated by aircraft using the airport”). Although Congress has revisited the issue of how best to control airport noise on a number of occasions, it has declined lla to alter the delegation to airport proprietors of the limited noise control authority described in the Secretary's 1968 let- ter. See S. Rep. No. 1160, 92d Cong., 2d Sess. (1972), reprinted in 1972 U.S. Code Cong. & Admin. News 4655, 4663 (accompanying Noise Control Act of 1972) (“[t]his does not address responsibilities or powers of airport operators ...’); S. Rep. No. 52, 96th Cong., 2d Sess. 13 (1980), reprinted in 1980 U.S. Code Cong. & Admin. News 89, 101 (accompanying Aviation Safety and Noise Abatement Act of 1979) (“[NJothing in the bill is intended to alter the respective legal responsibilities of the Federal Government and local air- port proprietors for the control of aviation noise.”).’ [5] The conditions Congress imposed on the grant to local airport proprietors of money from the Airport and Airway Trust Fund are designed in part to insure the maintenance of conditions essential to an efficient national air transport sys- tem, including access to airports on a reasonable and nondis- criminatory basis. Section 2210(a) of the Airport and Airway Improvement Act of 1982 requires the Secretary of Transpor- tation to obtain certain assurances from airport proprietors as a condition of receiving a grant from the Fund. The first of these conditions is that the Secretary must receive assurances in writing, satisfactory to the Sec- retary that - (1) the airport to which the project relates will be available for public use on fair and reasonable terms and without unjust discrimination *Neither the FAA or this Court has considered whether the Airport Noise and Capacity Act of 1990, 49 U.S.C. app. §§ 2151-58, alters this division of responsibility since the Act was passed after the administrative proceedings were completed. We also note, but do not consider, Congress’ 1990 declaration that the Airport and Airway Improvement Act “should be administered in a manner consistent with” the goal of “preventing unjust and discriminatory practices, including as they may be applied between category and class of aircraft.” 49 U.S.C.A. app. $ 2201(a)(5) (1991) (em- phasis added). 12a 49 U.S.C. app. § 2210(a)(1).* Grants must be offered upon terms and conditions the Secretary considers necessary to meet the requirements of the statute, 49 U.S.C. § 2211(a), and the Secretary may not approve a grant application unless the Secretary is satisfied that this and other requirements of the statute have been met. 49 U.S.C. app. § 2208(b)(1)E. Pursuant to this statutory scheme, San Francisco received grant offers requiring San Francisco to assure the Secretary, in language tracking the statute, that it would operate its Air- port on a fair and reasonable basis and without unjust discrim- ination. A grant agreement based on such an offer is not an ordinary contract, but part of a procedure mandated by Con- gress to assure federal funds are disbursed in accordance with Congress’ will. Whether San Francisco violated this assurance depends upon whether its regulation conflicted with the statu- tory condition imposed by section 2210(a)(1) and incorpo- rated in the grant contract.‘ [6] While we review questions of statutory interpretation de novo, we accord substanual deference to the interpretation adopted by the agency charged with administering the statute. Utility Reform Project v. Bonneville Power Admin., 869 F. 2d 437, 442 (9th Cir. 1989). The FAA’s interpretation of what constitutes unjust discrimination within the meaning of section 2210(a)(1) will be upheld unless it is unreasonable. See id. Deference is especially appropriate because Congress *The conditioning of federal grants to airport proprietors on assurances the airport will be available “for public use on fair and reasonable terms aod without unjust discnmination” has a long history. The language in the present Act is taken directly from its predecessor, the Airport and Airway Development Act of 1970, Pub. L. No. 91-258, Title I, § 18, 84 Stat. 229 (1970), which continued the language from its predecessor, the Federal Airport Act, Pub. L. No. 79-377, § 11, 60 Stat. 176 (1946). “Because the relevant language in the 1982 airport improvement act and its 1970 predecessor is identical, see supra note 3, it is irrelevant whether the particular grant assurances al issue were made pursuant tO one act or the other. 13a expressly mandated FAA enforcement of the statute by the Secretary (who delegated that duty to the Administrator) and, as the administrative record in this Case demonswrates, appli- cation of the statute to airport noise regulations requires tech- nical expertise. Ul A The Administrative Law Judge found San Francisco had excluded the Q707 under the noise regulation because San Francisco had concluded the Q707 was noisier in takeoff than any other aircraft using the Airport. The ALJ found San Fran- cisco’s determination had been mistaken, and that other air- craft permitted to use the Airport under the regulation were as noisy or noisier than the Q707. The FAA Administrator stated: [San Francisco] has apparently abandoned its con- tention that the aircraft’s takeoff noise exceeded that of all other aircraft at [the Airport]. Indeed, [San Francisco] concedes the correctness of the Ini- tial Decision’s factual findings that during the period the Q707 has been denied permission to operate at the Airport, 15 other models of aircraft, emitting as much or more noise than the Q707, have been per- mitted to operate there; and that operators of these airlines have been permitted to increase the number of flights with these aircraft types. [San Francisco] also does not dispute that at least 560 takeoffs and landings are performed each month at [the Airport] by six aircraft models noisier than the Q707. The factual assumption on which San Francisco denied a waiver to the Q707 was similarly mistaken. San Francisco based the denial on its conclusion the Q707 met Stage 2 stan- dards through the use of thrust cutbacks and decibel tradeoffs, l4a and would therefore be noisier in takeoff than all other aircraft at the Airport. The ALJ found, on substantial evidence, many aircraft models operating at the Airport, including aircraft models conducting more than half the departures from the Airport in 1985, also met Stage 2 requirements through the use of cutbacks and tradeoffs, and, as mentioned earlier, some of these planes were as noisy or noisier in takeoff than the Q707. [7] The Administrator approved the ALJ’s holding that because San Francisco’s noise regulation allowed planes that were equally noisy or noisier than Q707s to operate at the Airport and increase in number without limit, while excluding the Q707 based on a characteristic that had no bearing on noise (date of type-certification as meeting Stage 2 require- ments), the regulation violated the requirement of section 2210(a)(1) and of San Francisco’s grant assurance that the Airport would be available “without unjust discrimination.” The Administrator noted [e}xclusion of the Q707 based on the date of modifi- cation, rather than the date of complying operation is neither rational nor reasonable. The date of retrofit is irrelevant to the amount of noise an aircraft emits. [8] We are satisfied that the Administrator’s interpretation of section 2210(a)(1), and therefore of the grant assurance, was reasonable. The Administrator held the issue to be resolved was whether [San Francisco’s] actions were discriminatory, as demonstrated by the evidentiary record and application of appropriate decisional law. In this respect, the ALJ’s reliance on the Concorde Cases was proper. We agree with the Administrator. The central issue was whether San Francisco’s regulation was unjustly discrimina- tory within the meaning of the statute, and the Second Cir- 15a cuit’s Concorde Cases were sound authority for the conclusion that it was.° Concorde I recognized that the interest in a safe and effi- cient national air transport system reflected in the federal leg- islative scheme required that local airport proprietors exercise their power to control airport noise in a reasonable and non- discriminatory fashion and in conformity with federa’ law, including specifically the requirement that airports be “available for public use on fair and reasonable terms and without unjust discrimination.” 558 F.2d at 85. Concorde II applied this principle to enjoin an airport proprietor from fur- ther delaying access to its airport by a supersonic plane when the record established the supersonic plane sausfied the decibel-based noise standard applied by the airport proprietor to subsonic aircraft that were permitted to use the airport. The court stated the decision was based in part upon the court’s obligation to enforce “the proprietor’s observance of the strict Statutory obligation to make his facility available for public use on fair and reasonable terms, and without unjust discrimi- nation ....” 564 F.2d at 1011. In Concorde II, as in the present case, the action of an air- port proprietor purporting to exercise delegated authority to reguiate noise was held to constitute “unjust discrimination” *The FAA Administrator rejected San Francisco’s contention that the equal protection clause provides the measure of legality of San Francisco’s noise regulation. San Francisco argued New Orleans v. Dukes, 427 U.S. 297 (1976), provided the appropnate test. As the Administrator noted, however, New Orleans v. Dukes applies only when the Equal Protection Clause alone is invoked and not, as in this case, “when local regulation is Challenged under the Supremacy Clause as inconsistent with relevant fed- eral laws... .” 427 U.S. at 304 0.5. San Francisco’s argument its exclusion of the Q707 was valid because it had a reasonable belief the Q707 was noisier than all other planes is based on its mistaken reliance on equal protection law and was properly rejected by the FAA. In any event, the ALJ found San Francisco did not have such a reasonable belief. 16a within the meaning of the statute when the action resulted in denial of use of the airport to planes that met noise standards applied to other aircraft allowed use of the eT Concorde II, 564 F.2d at 1012.° [9] In the present case, as in the Concorde Cases, use of noise control regulations by an airport proprietor to bar air- craft on a basis other than noise, or without a factual basis, was found to be inconsistent with a fair and efficient national air transport system. This test of “unjust discrimination” is a permissible construction of the language of section 2210(a)(1) and the policies it serves. San Francisco argues its noise regulation is valid because San Francisco had a rational basis for believing the regulation would reduce Airport noise levels by eliminating the Q707, admittedly a noisy aircraft, and encouraging a shift to quieter Stage 3 aircraft. The argument rests in part upon the conten- tion that equal protection law provided the appropriate test for *Similarly, in Santa Monica Airport Ass’n. v. City of Santa Monica, we struck down a ban on the operation of jet aircraft on the basis of noise under the commerce and equal protection clauses because the quality and quantity of noise emitted by the jets had no greater tendency to immtate and annoy than that emitted by permitted prop planes. Sania Monica, 659 F.2d 100, 105 (9th Cir. 1981), affirming 481 F. Supp. 927, 943-44 (C.D. Cal. 1979). Although the statutory prohibition against “unjust discrimination” was not applicable, the district court indicated it would have rejected an argument that “grant agreement rights and the Federal Aviation Act obli- gations are any broader or different than the constitutional issues.” 481 F. Supp. at 946. San Francisco’s reliance on Global Int’! Airways v. Port Auth. of New York 727 F.2d 246 (2d Cir. 1984) (Global 1), as support for its regulation is misplaced. Global / held airport proprietor noise regulations could be aimed at reducing cumulative noise levels rather than barring aircraft that exceeded a maximum decibel level, but also noted aircraft could only be denied use of an airport “on the basis of non-discriminatory noise criteria.” Global I, 727 F.2d at 248. The court did not decide whether the noise reg- ulation before it was unjustly discriminatory. See Global Int’! Airways v. Port Auth. of New York, 731 F.2d 127, 130 0.1 (2d Cir. 1984) (Global IN. 17a evaluating the regulation, a contention the Administrator properly rejected. See supra note 5. Moreover, it was not unreasonable for the FAA to interpret the statute as requiring more than that San Francisco’s regulation reduce noise, since the statute required the Airport be available “without unjust discrimination,” a requirement obviously important to an effi- cient national air transport system dependent upon flights by particular aircraft to various airports along a national route. Exclusion of jet-propelled or supersonic aircraft would have reduced noise, yet the discmmunatory exclusion of these planes was held to be beyond the power of local airport pro- pnietors. See Santa Monica, 659 F.2d at 105; Concorde II, 564 F.2d at 1012. San Francisco also argues it reasonably denied the Q707 a waiver because allowing Burlington’s Q707s to operate would increase the cumulative noise level at the Airport by “opening the floodgates” to operauons by Q707s owned by others as well as to other Stage | aircraft retrofitted after the cut-off date. Again, the FAA was not required to approve a discriminatory regulatory scheme simply because it may have had the effect of reducing noise. It was only because of the 1978 Regulation that the Q707 had to apply for a waiver in the first place; that San Francisco might find non- discriminatory grounds for barring the Q707 once the waiver Stage was reached does not validate the discriminatory regula- tory scheme itself. San Francisco argues its 1978 regulation is a lawful exer- cise in “grandfathering” under New Orleans v. Dukes, 427 U.S. 297 (1976), which rejected an equal protection challenge to a local regulation that banned pushcart vendors but exempted vendors who had operated eight years or more. See also Western Air Lines v. Port Auth. of New York, 817 F.2d 222, 226 (2d Cir. 1987) affirming 658 F. Supp. 952, 959-60 (S.D.N.Y. 1986) (uphoiding an exercise of “grandfathering” in airport regulation). The FAA questioned the applicability of Dukes to this case, which does not involve an equal protec- 18a tion challenge and does involve an explicit statutory prohibi- tion against unjust discrimination. In any event, San Francisco’s 1978 Regulation does not grandfather planes, but types of planes. The number of takeoffs and landings by air- craft as noisy or noisier than the Q707 at San Francisco Air- port could actually increase rather than decrease as a result of the regulation, refuting the contention it was simply an exer- cise in “grandfathering.” San Francisco argues it cannot ban the noisiest types of air- craft from its Airport because five of the six models noisier than the Q707 are Boeing 747s, crucial for long-distance international travel, and it would be impractical and an undue burden on interstate commerce to ban them. Even if true, this would not justify exclusion of the Q707 on the basis of a fac- tor — date of type-certification as meeting Stage 2 standards — unrelated to noise. B San Francisco asserted a defense of impossibility to the allegation it had breached its grant assurances, claiming its noise regulation was necessary to comply with California law. California requires airport proprietors to meet certain noise standards or obtain a variance to continue operating. See Cal. Pub. Util. Code §§ 21661-669.6; 21 Cal. Code of Regulations §§ 5000-90. See also Air Transport Ass'n of America v. Crotti, 389 F. Supp. 58, 61-62 (N.D. Cal. 1975) (descnbing California’s regulatory scheme). In 1982 San Francisco obtained a variance from the California Department of Trans- portation requiring that San Francisco “not knowingly permit or authorize any activity in conjunction with the Airport which results in an increase of the size of the noise impact area....” The version of the variance still in force commits San Francisco to “continue reducing the number of dwelling units located within the 65 [decibel] or greater’ range of the Airport. San Francisco argues that admitting the Q707 would violate the terms of this variance. 19a [10] We reject San Francisco’s suggestion that a state con- tract defense could authorize San Francisco to adopt a noise regulation prohibited by federal law. Assuming the contrary, however, there is no merit in the defense. As the FAA pointed out, San Francisco failed to show that admitting the Q707 would violate the variance. Moreover, we note that the 1978 Regulation was not the only method San Francisco might choose to comply with the variance; the Q707 could be barred from operating at the Airport if the regulation barring it was not unreasonably discriminatory.’ [ In 1988, San Francisco adopted a new noise regulation requiring, effective in 1989, all carriers conduct at least 25% of their operations at the Airport with Stage 3 aircraft. Since Burlington has announced it will continue to use only Stage 2 aircraft, San Francisco argues the new regulation will pre- vent Burlington from operating at the Airport independently of the 1978 Regulation, and therefore, mooted any previous violation of San Francisco’s assurance based on the 1978 Regulation. Even if Burlington were to buy enough Stage 3 planes to comply with the 25% requirement, however, its remaining Q707s still would be excluded, while other operators combin- ing “grandfathered” Stage 2 retrofits with Stage 3 aircraft "Because San Francisco was not required by California law to adopt its 1978 Regulation, the FAA correctly held California was not a necessary party to the admunistrative proceeding. California, as amicus Curie, agrees California law did not subject San Francisco to imconsistent obligations and that Califormmia was not a necessary party. However, Californi> urges us to reject language in the FAA Admunistrator’s ruling that California's efforts at airport noise control through variances are preempted by federal law, arguing the Admunistrator’s broad language about federal preemption stems from a misreading of our decision in San Diego Unified Port Dist. v. Gianturco, 651 F.2d 1306 (9th Cir. 1981). Resolution of the issue is not necessary tO Our decision, and we decline to address it. 20a would not be. Thus, San Francisco’s regulatory scheme con- tinues to discriminate against the Q707. {11] San Francisco argues Burlington failed to exhaust its administrative remedies by not seeking a waiver of the 1988 resolution. The FAA correctly concluded such an application would be futile: the same discrimination against the Q707 exists under the 1988 regulation as under the 1978 Regula- tion, for which a waiver was denied. IV (12] In 1987, Congress amended the Airport and Airway Improvement Act to impose a 180-day limit on the time the FAA may take to consider airport improvement grant applica- tions. The amendment, codified at 49 U.S.C. app. § 2218(b) (1), provides: The Secretary may not withhold approval of a grant application ... for a violation of an assurance or other requirement of this chapter unless — (A) the Secretary provides the applicant with an opportunity for a hearing; and (B) within 180 days after the date of such applica- tion or the date the Sec? wary first knows of such noncompliance, whichever is later, the Secretary makes a determination that the violation has occurred. The parties agree the FAA did not deny or approve San Fran- cisco’s grant applications for fiscal years 1986 through 1989 within the mandated period. San Francisco argues the FAA is required by section 2218(b) to set aside the airport improve- ment funds at issue even if we uphold the FAA’s decision that the noise regulation violates the statute and San Francisco’s assurance. We agree in part. 2la [13] The statutory language is mandatory, leaving the FAA no discretion. It compels timely approval or denial of grant applications. The House bill originally set the limit at 90 days. The Senate-House conference extended the deadline to 180 days with the stated expectation that the FAA “will adopt pro- cedural schedules which will permit cases to be completed in 180 days, without depriving parties to the cases of procedural due process.” H.R. Conf. Rep. No. 484, 100th Cong., 1st Sess. 69, reprinted in 1987 U.S. Code Cong. & Admin. News 2533, 2644. The purpose of the amendment can be inferred from the deadlines placed on appropriations of entitlement funds. If such funds are not obligated to an airport by the end of the second fiscal year following the final year to which the enti- tlement applies, the entitlement will lapse. See 49 U.S.C. app. § 2207(a). Delay in approving the grant application, or in administrative review of a denial, would put the funds in dan- ger of lapsing without a final judgment that could be judi- cially reviewed. See City and County of San Francisco v. Engen, 819 F.2d 873, 875 (9th Cir. 1987). Congress appar- ently sought to avoid this danger by mandating a prompt deci- sion by the FAA. [14] The FAA argues the statute does not apply retroac- tively and so does not compel approval of grants for the years 1986 and 1987. San Francisco agrees, but notes it refiled the grant applications for these years after the statute was amended. The FAA points to no bar to refiling applications for previous years. We hold the refiled applications are sub- ject to the 180-day limitation period in the same way as newly filed ones. The FAA argues grant approval would be meaningless. Section 2218(b) allows the Administrator to continue to with- hold already-obligated payments for another 180 days without a hearing or decision. The FAA argues it had a total of 360 days to decide whether or not to withhold payment, and met that deadline. It would be a “useless gesture,” the FAA con- 22a cludes, to order grant approval when the Administrator may refuse to pay. We disagree with the FAA’s reading of the statute. If Con- gress had wanted to establish a single 360-day period for grant approval and fund disbursement, it could easily have said so. This case does not require us to decide whether the FAA may decline to disburse the funds generated by the Ccur- rent grant applications, and we leave that question to another day. Finally, the FAA argues San Francisco should be estopped from invoking the 180-day time limit because San Francisco's own refusal to abide by a tighter discovery schedule caused the delay. San Francisco presented evidence it proposed the discovery schedule in reliance on the FAA’s representation the proceeding was not the required statutory “hearing” under section 2218(b). The FAA does not suggest the discovery pro- posal was improperly motivated. In any case, even under the FAA’s proposed schedule, completion of the hearing and administrative appeal process within the required period would have been difficult if not impossible. Although the FAA admits it failed to approve or deny San Francisco’s fiscal year 1986 and 1987 applications within the statutory period, it argues its December 12, 1988 decision finding San Francisco in violation of grant assurances for the 1986 and 1987 fiscal years, and rejecting San Francisco’s applications for these years and while the discriminatory regu- lation remained effective, disposed of the need to consider future grant applications until San Francisco cured the default. We agree. It would be a useless paper-shuffling for the FAA to respond each year to a grant request premised on identical circumstancés as the grant request rejected the previous year. San Francisco was entitled to have its applications approved under the statute only for the 1986 and 1987 fiscal years. 23a V The County of San Mateo (San Mateo) appeals the ALJ’s decision to deny it full intervenor status. San Mateo was not allowed to offer tesumony, file motions, or participate in arguments and settlement negotiations, although it did file briets and observe the proceedings. Intervention in FAA pro- ceedings is permissive under FAA regulations if the interve- nor “has a property or financial interest thai may not be adequately represented” and “intervention will not unduly broaden the issues or delay the proceedings.” 14 C.F.R. § 13.51 (1991). San Mateo’s interest in this case stems from San Francisco International Airport’s location in San Mateo County, and the effects of Airport noise on at least 20,000 County residents. The ALJ concluded San Francisco could adequately represent San Mateo’s interest in enforcing the regulation. San Mateo argues San Francisco could not adequately rep- resent its interests because San Mateo and San Francisco Air- port had been adversaries in previous state noise variance permit proceedings. However, the relevant consideration is whether the interests of the parties diverged in this proceed- ing, not in any other. See United States v. American Tele- phone and Telegraph Co., 642 F.2d 1285, 1293 (D.C. Cir. 1980) (adequacy of representation must be assessed in rela- tion to the specific purpose of intervention). San Francisco had the same incentive as San Mateo to support the 1978 noise regulation. It was not an abuse of discretion to deny San Mateo County more than limited intervention. VI [15] We affirm the FAA’s determination that the 1978 Reg- ulation violated San Francisco’s grant assurance. We also affirm the FAA’s decision that California was not a necessary party to the administrative proceeding, and the FAA’s deci- sion to deny San Mateo County full intervenor status. How- 24a ever, we direct the FAA to approve San Francisco’s applications for fiscal years 1986 and 1987 because the FAA failed to comply with 49 U.S.C. app. § 2218(b). AFFIRMED in part, REVERSED in part. Each party to bear its own costs on appeal. DFo APPENDIX B UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No. 89-70055 CITY AND COUNTY OF SAN FRANCISCO; THE AIRPORTS COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO, Petitioners, v. FEDERAL AVIATION ADMINISTRATION; DEPARTMENT OF TRANSPORTATION, NATIONAL TRANSPORTATION SAFETY BOARD, Respondents. No. 89-70053 COUNTY OF SAN MATEO, Petitioner, v. FEDERAL AVIATION ADMINISTRATION; DEPARTMENT OF TRANSPORTATION, NATIONAL TRANSPORTATION SAFETY BOARD, Respondents. 26a No. 89-70057 CITY AND COUNTY OF SAN FRANCISCO: THE AIRPORTS COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO, Petitioners, v. FEDERAL AVIATION ADMINISTRATION; DEPARTMENT OF TRANSPORTATION, NATIONAL TRANSPORTATION SAFETY BOARD, Respondents, BURLINGTON AIR EXPRESS (“BURLINGTON’’), Respondent-Intervenor. No. 89-70482 CITY AND COUNTY OF SAN FRANCISCO: THE AIRPORTS COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO, Petitioners, v. FEDERAL AVIATION ADMINISTRATION; DEPARTMENT OF TRANSPORTATION, NATIONAL TRANSPORTATION SAFETY BOARD, Respondents. Zia No. 89-70483 CITY AND COUNTY OF SAN FRANCISCO; THE AIRPORTS COMMISSION OF THE CITY AND COUNTY OF SAN FRANCISCO, Petitioners, v. FEDERAL AVIATION ADMINISTRATION; DEPARTMENT OF TRANSPORTATION, NATIONAL TRANSPORTATION SAFETY BOARD, Respondents No. 89-70500 COUNTY OF SAN MATEO, Petitioner, v. FEDERAL AVIATION ADMINISTRATION; DEPARTMENT OF TRANSPORTATION, NATIONAL TRANSPORTATION SAFETY BOARD, Respondents. ORDER Before: BROWNING, PREGERSON and TROTT, Circuit Judges. San Francisco’s petition for rehearing and suggestion for rehearing en banc is untimely, See Fed.R.App.P. 35(c), 40(a), and an extension of time is denied. San Francisco’s petition will not be filed. a 28a APPENDIX C U.S. DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION WASHINGTON, D.C. FAA Docket No. 13-86-2 In Re San Francisco Airports Commission ADMINISTRATOR’S DECISION AND FINAL ORDER OF NONCOMPLIANCE AND DEFAULT SYNOPSIS: The Administrator has determined that actions of the San Francisco Airports Commission excluding a Burlington Air Express Stage 2 compliant Q707 aircraft from San Francisco International Airport violate Assurance No. 20 of grant agreements between the Commission and the Fed- eral Aviation Administration under the Airport and Airway Development Act of 1970, which require the Commission to operate the airport for the use and benefit of the public on fair and reasonable terms and without unjust discrim- ination. Accordingly, the Federal Aviation Administration’s temporary suspension of funding approvals for San Fran- cisco International Airport projects is affirmed and made final. In addition, no further applications for grant funds involving the San Francisco International Airport shall be approved until the Commission complies with its grant obligations. I. BACKGROUND The San Francisco Airports Commission (‘‘Commis- sion’’), operator of the San Francisco International Airport (“SFIA”’), for the proprietor, the City and County of San 29a Francisco, is charged with actions constituting unjust dis- crimination and, thus, noncompliance with and default of certain contractual obligations (assurances) contained in various grant agreements entered into with the Federal Aviation Administration (FAA) for receipt of Federal funds. The charge is based on the Commission’s refusal, pursuant to its noise abatement regulations, to permit Bur- lington Air Express, a cargo airline, to operate FAR (Fed- eral Aviation Regulation) Part 36 (14 C.F.R. Part 36) Stage 2 compliant retrofitted Boeing Q707 aircraft at SFIA, be- ginning in 1985, while, at the same time, allowing as noisy or noisier Stage 2 aircraft to operate. In November 1984, Burlington purchased eight used B707-300, Stage 1 aircraft, which were to be operated by Southern Air Transport (“SAT’’) under lease. Over the next year, the aircraft were retrofitted with hush kits to satisfy the Stage 2 noise standards of Part 36 and were redesignated as Q707s. On March 6, 1985, the FAA issued a supplemental type certificate for the first of the retro- fitted aircraft, finding it in compliance with the Part 36 Stage 2 noise standards. By April 16, 1985, seven of the planes had been certificated as Stage 2 noise compliant. On September 20, 1985, Southern Air Transport sought permission to operate the Q707 at SFIA, beginning No- vember 1, 1985, by filing an application for a waiver! of Commission Resolution 78-0131, a 1978 noise abatement regulation which provided, in part: In order to continye operating at San Francisco International Airport all commercial jetpowered transport type aircraft, which are of an aircraft type now operating at San Francisco Interna- ' Pursuant to this Resolution, the Commission permitted aircraft types not previously operated at SFIA (e.g., the Q707) to commence opera- tions only if the aircraft type had been certified by the FAA as meeting Part 36 requirements prior to January 1, 1985. The Resolution also autnorized a ‘‘waiver’” of this date requirement by the Commission. 30a tional Airport must: (1) be certified under the Federal Aviation Regulations-Part 36 Noise Standards; or (2) be replaced prior to January 1, 1985, with an aircraft that is certified under Fed- eral Aviation Regulations-Part 36: or (3) receive currently approved retrofit mocifications so as to be in compliance with FAR 36 as implemented by Subpart E, FAR Part 91. Retrofit modifica- tions must be accomplished no later than January 1, 1985. In order to operate at San Francisco Interna- tional Airport all commercial jetpowered trans- port type aircraft, subsonic or supersonic, which are of a type not presently operating at San Francisco International Airport must be certified under Federal Aviation Regulations-Part 35 Noise Standards prior to commencing operation. On October 17, 1985, Louis A. Turpen, Director of Air- ports, denied the request for a waiver of Resolution 78- 0131. The reasons stated for denial were that the Q707’s compliance with Part 36 Stage 2 standards relied on the “decibel tradeoff’ and “thrust cutback”’ procedures of Part 36; that the Q707’s noise at takeoff was 2dB higher than the maximum authorized for Stage 2 compliance, which would make that aircraft noisier at takeoff than any other aircraft at SFIA;° and that the Airport was required to reduce its noise impact area under the terms of its vari- ance from a California noise law. FAA Counsel Notice, Exh. 8. Following the Commission’s denial of waiver, negotia- tions about operating the Q707 at SFIA ensued among ? These procedures, specifically permitted by Part 36 to achieve Stage 2 standards, are set out at 14 C.F.R. § 36.7(c) and § 36.5(b), and are described in the Initial Decision (“‘I.D."’) at 4-5, n. 3. 3 See, n. 4, infra. 3la the Commission, FAA officials, Burlington, and SAT, but these efforts were not successful. During this time, the Commission also adopted, on December 17, 1985, Airport Operations Bulletin 85-07-AOB, which stated that waivers would not be granted for any aircraft type that relied on “cutback”’ or “‘tradeoff’’ to meet Stage 2 noise standards on take off. FAA Counsel Notice, Exh. 12. In addition, a series of letters to the Commission from various FAA officials affirmed the validity of the cutback and tradeoff provisions and cautioned the Commission that its exclusion of the Burlington Q707 appeared arbitrary and unjustly discriminatory under applicable Federal statutes and grant agreements. See, e.g., FAA Counsel Notice, Exh. 11. On January 9, 1986, the Airport Director informed an FAA official that further consideration of Burlington’s re- quest would require resubmission of the waiver application, this time as a request for a variance, in order to “‘exhaust administrative remedies.’’ FAA Counsel Notice, Exh. 13. Burlington sought the variance, and the Commission re- ceived information regarding the application on March 18, 1986. The Commission issued Resolution 86-0073 on April 15, 1986, denying Burlington a variance and affirming its earlier decision not to permit Q707 aircraft to operate at SFIA.* FAA Counsel Notice, Exh. 16. On May 1, 1986, Burlington requested reconsideration of the Commission’s Resolution (FAA Counsel Notice, Exh. 17); on May 12, the Airport Director denied reconsideration. FAA Counsel Notice, Exh. 18. Following the Commission’s initial refusal in October 1985, and after negotiations proved unsuccessful, Burling- ton filed a complaint with the Federal Aviation Adminis- ‘One of the Resolution’s findings was that without cutback, the Q707 was “‘significantly louder in takeoff mode than any other aircraft per- mitted to operate at SFIA since January 1, 1985.’’ Exh. 16. Evidence at hearing demonstrated that this finding was incorrect. Initial Decision at 7-9. The Commission subsequently abandoned this contention. 32a tration on April 2, 1986, pursuant to 14 C.F.R. § 13.5 (FAA Counsel Notice, Exh. 1). The Commission responded on June 24, 1986, denying that its actions were arbitrary or discriminatory. On July 7, 1986, the Federal Aviation Administration’s Office of Chief Counsel (‘‘FAA Counsel’) commenced an enforcement proceeding against the Commission by filing a ‘‘Notice of Proposed Cease and Desist Order’ (“FAA Notice’) charging that unjustly discriminatory, unreason- able, arbitrary, and in violation of statute (49 U.S.C. 1701 et seqg.; 49 U.S.C. 2201 et seg.; and 49 U.S.C. 1349(a)) and of various assurances in grant agreements for Federal funding for SFIA the Commission had entered into with the FAA. On the same day, FAA Counsel temporarily suspended approval of Commission applications for Federal airport funds, pending the outcome of this proceeding. On January 22, 1988, the Commission repealed its 1978 Resolution (78-0131), replacing it with a new resolution (Resolution 88-0016), which serves as the basis for the Commission’s continuing exclusion of the Q707. Section 4(a) of Resolution 88-0016 states: ... [a]n aircraft will be permitted to commence or continue operation at SFIA only if it is a Stage 3 aircraft or a Stage 2 aircraft of a type of Stage 2 aircraft operating at SFIA on or be- fore January 1, 1985. II. APPEAL OF PREHEARING RULINGS This proceeding, initiated by the July 7, 1986 Notice of Proposed Cease and Desist Order, was assigned to United States Department of Transportation Chief Administrative Law Judge (ALJ) William A. Kane, Jr., on August 27, 1987. The proceeding has been lengthy, due, at least in part, to a number of motions and related rulings, both procedural and substantive, filed prior to the commence- ment of hearing on May 2, 1988. Following issuance of 33a the ALJ’s Initial Decision on August 9, 1988, the Com- mission, FAA Counsel, Burlington, SAT, and San Mateo County appealed, pursuant to 14 C.F.R. § 13.20, the Initial Decision and various rulings rendered by the ALJ during the course of the proceeding. Parties filed briefs on Sep- tember 19, 1988, and reply briefs on October 11. Appeals concerning the various prehearing rulings will be consid- ered first. A. Dismissal of Charges The July 1986 Notice contained five charges. FAA Counsel charged that the Commission’s actions in exclud- ing Burlington were: (1) a violation of § 18 of the Airport and Airway Development Act of 1970, 49 U.S.C. § 1701 et seq. (‘1970 Act’’) and (2) a violation of §511 of the Airport and Airway Improvement Act of 1982, 49 U.S.C. § 2201 et seg. (‘1982 Act’’), both of which require written assurances from grantees that the airport to which a fed- erally funded project relates ‘“‘... [will be available for public use on fair and reasonable terms and without unjust discrimination. .. .’’; (3) a violation of assurances contained in the grant agreements between the Commission and the FAA executed under the 1970 Act; (4) a violation of iden- tical assurances contained in grant agreements executed under the 1982 act, in all of which the Commission prom- ised that SFIA ‘will be available for public use on fair and reasonable terms and without unjust discrimination’; and (5) a violation of § 308(a) of the Federal Aviation Act, 49 U.S.C. § 1439(a), which prohibits an airport from pro- viding an ‘“‘exclusive right for the use of any landing area or air navigation facility upon which federal funds have been expended.” On March 13, 1987, the Commission failed a motion to dismiss or to strike the July 1986 Notice.* On August 13, *FAA Counsel and Burlington each filed an answer opposing the motion on April 10, 1987; the Commission filed a reply on April 20, 34a 1987, the ALJ issued an order® granting, in part, the Com- mission’s motion and ordering the case to proceed to hear- ing on only one of the charges: the alleged violation of Assurance No. 20 of grant agreements entered into be- tween the Commission and the FAA under the 1970 Act.’ FAA Counsel and Burlington appeal the ALJ’s dismissal of three of the charges. 1. 1982 Act Statutory and Grant Assurance Charges FAA Counsel and Burlington contend that the ALJ’s dismissal of the Notice’s statutory and grant assurance charges based on the Airport and Airway Improvement Act of 1982, on the grounds of lack of subject matter jurisdiction, was in error. The ALJ ruled that he lacked jurisdiction to consider charges based on the 1982 Act because the procedural regulations governing this case, 14 C.F.R. Part 13, had not been updated to list the 1982 Act among the statutes covered by these procedural regula- tions.’ The procedural regulations of 14 C.F.R. Part 13, “‘In- vestigative and Enforcement Procedures,” contain the rules of practice for FAA hearings (Subpart D). These are not substantive regulations. Part 13 contains no guidelines re- 1987; and FAA Counsel and Burlington filed sur-replies on April 30, 1987. * Petitions for reconsideration of the August 13 order were filed, and the ALJ vacated portions of that order and issued an amended order on November 3, 1987. That order reiterated the dismissal of all but one of the Notice charg?» ’The ALJ also made substantive rulings on several matters in his August 13, 1987 order. Certain of those rulings are also appealed, and are treated separately in this Decision and Final Order. * Because the procedural regulations list the Airport and Airway De- velopment Act of 1970, the Administrative Law Judge did not dismiss the charge of grant assurance violation related to grants under that Act; however, the ALJ dismissed the 1970 Act’s statutory charge, finding that the 1970 Act had been repealed by enactment of the 1982 Act. No party has appealed dismissal of that charge. 35a garding the manner in which charges of statutory or con- tractual violations related to the Airway and Airport Improvement Act of 1982, or any other statute, are to be interpreted. Substantive standards of the 1982 Act are set forth in that Statute; Congress created the standards and assigned the FAA the duty of implementing and enforcing them. The Part 13 regulations are procedural only; as such, they are not, and cannot be, jurisdiction for a proceeding. Even if no Part 13 regulations existed, the FAA could enforce its grant agreements as long as due process was afforded the grant recipients. It is unclear why the ALJ misapprehended the proce- dural nature of the Part 13 regulations, or why he failed to distinguish procedural from substantive regulations. Re- gardless of his reasons, however, I find that the ALJ’s dismissal of the charges related to the 1982 Act was clear error. FAA Counsel urges that I issue a ruling on the 1982 Act charges, pursuant to the authority of §§ 509 and 511 of the 1982 Act. In support of this argument, FAA Counsel points out that the 1982 Act did not substantively change the applicable nondiscrimination requirements of the 1970 Act, and that the grant assurances the Commission agreed to as a condition for receipt of Federal funds under both Acts are identical. Given the identity of the statutory pro- visions and grant assurances, it is likely that the record established in this proceeding and affirmance of the ALJ’s substantive finding of discrimination under the 1970 Act grant assurances, discussed infra, would be sufficient to support a determination that the Commission violated grant assurances it entered under the 1982 Act. The Commis- sion, however, contends that this case must be remanded to the ALJ for further proceedings, should it be deter- mined that dismissal of the charges related to the 1982 Act was improper. However, I find I need not formally decide this issue. In view of the affirmance of the ALJ’s substantive findings 36a and imposition of the remedy sought by FAA Counsel, infra, additional determinations based on the 1982 Act and associated grant agreements would not affect the outcome of this proceeding. 2. Exclusive Right Charge FAA Counsel and Burlington also appeal the ALJ’s Au- gust 138, 1987 dismissal of the charge that the Commis- sion’s actions violated § 308(a) of the Federal Aviation Act, 49 U.S.C. § 1849(a), which prohibits the grant of an ‘‘ex- clusive right” for the use of any federally funded landing area or air navigation facility. The ALJ dismissed this charge on the grounds that an exclusive right cannot be granted to an “indefinite uni- verse of persons;” that FAA Counsel had cited no prec- edent in support of its interpretation of § 308(a); and that the FAA had not made public its interpretation of this statutory provision. On appeal, FAA Counsel and Burlington contend that the ALJ erred because an exclusive right had been con- ferred on those carriers the Commission had allowed to operate at SFIA while excluding Burlington’s Q707. FAA Counsel further contends that the ALJ failed to afford proper deference to its interpretation of § 208(a), noting that the FAA’s policy interpretation of that provision was published in the Federal Register in 1965. Review of the ALJ’s August 18, 1987 Order (at 11-12) shows that the ALJ was particularly concerned with the failure of FAA Counsel to identify the party or parties to whom an exclusive right had been granted, finding no support in case law for the proposition that an exclusive right is granted to an entire class of persons who are not otherwise excluded. The ALJ found that the claim that “everyone in an indefinite universe of persons ... could be granted an exclusive right... because one party was denied that right’”’ was not an interpretation of § 308(a) 37a supported by the language of the statute or relevant prec- edent. On appeal, FAA Counsel still has failed to identify any such precedent. Moreover, while there is no doubt that Burlington has been ‘“‘excluded,’’ this does not mean that an ‘‘exclusive right’’ has been afforded the numerous other carriers serving SFIA. Thus, I find that ALJ’s dismissal of the § 308 charge in this proceeding was not error. This ruling should not be understood as meaning, or even implying, that an ‘exclusive right” can be conferred only on a single beneficiary. The case law is to the con- trary. See, e.g., Midway Airlines v. County of Westchester, 584 F. Supp. 436 (S.D.N.Y., 1984). Indeed, not even the Commission advocates such a narrow definition. However, application of § 308(a) to the circumstances of this case would be an overly broad reading of that statute. B. Additional Charges/Amendment of Notice FAA Counsel asserts that the ALJ also erred in refusing to permit amendment of its Notice to include charges that the Commission had excluded eight other operators who had sought permission to operate retrofitted Stage 2 Q707 and DC-8 aircraft at SFIA.’ Order of the ALJ, February 16, 1988. FAA Counsel contends that, contrary to the ALJ’s find- ing, inclusion of these additional charges would not have unduly burdened or delayed this proceeding. FAA Counsel also points out that under Part 13 (14 C.F.R. § 13.45), a complaint can be amended up to 10 days before hearing, * Except for Burlington, no carrier has filed a formal complaint as- serting exclusion from SFIA. If the Commission attempts to exclude other carriers operating Q707 or DC-8 aircraft, FAA Counsel can com- mence appropriate action at that time. In view of the principles es- tablished by this decision, such a future proceeding should be handled expeditiously. 38a and the request to amend was filed more than 90 days before hearing in this case. In general, ALJ rulings of this sort are entitled to de- ference and should be reversed only if there is a showing of a clear abuse of discretion. Thus, while the ALJ could have permitted amendment, FAA Counsel has not shown an abuse of discretion sufficient to reverse the ALJ’s de- termination. Indeed, in view of the inordinate amount of time this proceeding has consumed, the possibility that inclusion of additional charges would have further bur- dened or delayed this proceeding supports the ALJ’s den- ial. C. State of California The Commission alleges error in the ALJ’s refusal to determine whether exclusion of the Q707 was required by California airport noise variances. Order of November 3, 1987; Initial Decision at 6, n. 4. The Commission submits that its required compliance with the California noise var- iance law ‘“‘compelled’’ the Airport to exclude the Q707, and the ALJ’s refusal to rule on this issue combined with subsequent affirmance of the Initial Decision will result in the Commission facing inconsistent obligations of State and Federal law.*° This argument must be rejected. Efforts by the State of California to enforce noise conditions on variances is- sued to airport proprietors are preempted as a matter of Federal law. San Diego Unified Port District v. Gianturco, There has been no showing that admitting the Q707 would be inconsistent with the variance. Over time, is it likely that the noise contour at SFIA will continue to shrink, regardless of whether the Q707 operates, as additional Stage 3 aircraft are introduced by the airlines. While each flight adds a discrete amount of noise, the operation of some number of Q707 flights cannot, by itself, violate the variance, since its effect is not qualitatively different from adding flights with any aircraft—whether relatively noisy B-727s or quieter, Stage 3 air- craft. 39a 651 F.2d 1306 (9th Cir. 1981), cert. den., 455 U.S. 1000 (1982), citing City of Burbank v. Lockheed Air Terminal, 411 U.S. 624 (1973). Similarly, the Commission asserts that the ALJ im- properly refused to join the State of California as a party to this proceeding, based on the noise variance law. The ALJ denied the Commission’s motion on the ground that the State was not a party to the grant agreements at issue. As Gianturco, supra, makes clear, the ALJ’ s de- termination that the effect of the California noise variance law was irrelevant to this proceeding was correct. Finally, the Commission argues that because the Cali- fornia noise variance law compelled its exclusion of the Q707, the Commission has a ‘“‘complete defense” to any claim that it breached the grant agreements."' In other words, adherence to California law made the Commission’s performance under the grant assurances impossible, and non-performance resulting from impossibility discharges all contractual duties. Of course, this argument must be re- jected. As the State is preempted from taking action against the Airport, there is no “impossibility’’ and no discharge. D. San Mateo County San Mateo County, California, appeals the ALJ’s ruling of March 17, 1987, refusing to grant the County full party status as an intervenor. Intervention in a part 13 proceeding is limited to per- sons who demonstrate that they may be bound by the order to be issued, or who demonstrate a property of financial interest not adequately represented by existing ‘'In this regard, the Commission understands that violation of the grant assurances by the Commission in excludii.g the Q707 is a breach of the grant, or contract, between the Commission and the FAA. As the Commission obviously recognizes, the breaching party bears the liability. 40a parties. Intervention is not a matter of right. 14 C.F.R. § 13.15. San Mateo sought intervention on the grounds that San Francisco International Airport is located within that County; County residents are affected by SFIA noise; and it had a financial interest, based on tax revenues received from the Airport. The County, however, did not contend that these tax revenues would be adversely affected by any order that might issue, nor did the County show that its interests would not be adequately represented by the Commission. The ALJ found that the County would not be bound by any proceeding order. He further found that the County alleged no interest that could not be adequately repre- sented by the Airport Commission. In these circumstances, San Mateo was permitted to intervene, but the ALJ denied the County full party status, to avoid undue broadening of the issues or unwarranted delay. It is within the ALJ’s sound discretion to limit partic- ipation of intervenors in an appropriate manner. The limit on San Mateo’s participation (submission of written plead- ings and briefs) was appropriate; and the County has failed to demonstrate any abuse of discretion or any harm re- sulting from the ALJ’s refusal to permit the County to offer witnesses or cross-examine witnesses of other par- ties. E. Certification Challenzge/Discovery FAA Counsel and SAT assert error by the ALJ in a series of rulings permitting the Commission to challenge the validity of the FAA’s determination that the Q707 complies with Stage 2 certification requirements. SAT also objects to the ALJ’s permitting the introduction of evi- dence on prior FAA certification determinations. The ALJ also authorized substantial discovery relating to FAA certification processes and data, including issuance 4la of subpoenas against private manufacturers (the Boeing Company and Shannon/Tracor, manufacturer of the re- trofit hush kit used on Q707s).” FAA Counsel and SAT contend that allowing this chal- lenge to the validity of the FAA’s certification data, and the associated discovery, was unwarranted; that it resulted in unnecessary expansion of the proceeding; and that it improperly transformed the proceeding from a noncom- pliance and default case involving alleged breaches of con- tractual obligations into a hearing on the correctness of FAA noise determinations, a matter acknowledged as Fed- erally preempted. Section 611(bX1) of the Federal Aviation Act of 1958 (FAAct), as amended by the Noise Control Act of 1972, provides that the FAA, after consultation with the Sec- retary of Transportation and the Environmental Protection Agency, “shall prescribe and amend standards for the measurement of aircraft noise.. .”’ Section 611(b\(2) pro- hibits issuance of an original type certificate unless the Administrator has prescribed standards and regulations which apply to such aircraft and which protect the public from aircraft noise consistent with the highest degree of safety in air commerce or air transportation.'? Thus, the plain words of § 611 make clear the exclusive authority of * The Initial Decision describes this process: The Commission was given liberal permission by the judge over the vigorous objection of other parties to probe into the certification processes. ... Liberal dis- covery by the Commission was permitted against the Federal Aviation Administration. Every opportunity was given the Commission to show that the Q707 was noisier on takeoff at full thrust and maximum takeoff weight than the FAA contends. By the subpoenas to Boeing, the Com- mission was allowed to try to establish that other Boeing aircraft were noisier than shown by FAA's records."’ Initial Decision at 9-10. * Section 611(b) should be read in conjunction with § 603, which authorized the FAA Administrator to issue type certificates, and § 609, which provides that only the Administrator may re-examine or inves- tigate Part 36 certificates. 42a the FAA to set the standards for the measu.. nent of aircraft noise and to establish specific noise standards for the certification of aircraft. The legislative history of section 611, described in City of Burbank v. Lockheed Air Terminal, 411 U.S. 624 (1973), indicates the FAA’s exclusive authority for noise meas- urements and aircraft certifications, confirming Federal preemption of state and local actions involving the meas- urement of aircraft noise and certification: The Federal Aviation Act reav'res a delicate bal- ance between safety and «ciency, 49 U.S.C. § 1348(a), and the protection of persons on the ground. 49 U.S.C. § 1348(c). Any regulations adopted by the Administrator to control noise pollution must be consistent with the “highest degree of safety.”” 49 U.S.C. § 14381(d\(3). The interdependence of these requires factors a uni- form and exclusive system of federal regulation if the congressional objectives outlined in the Federal Aviation Act are to be fulfilled. Id. at 638-39. Section 611 expressly permits local airport noise regu- lation by proprietors; however, local authority to regulate does not extend to the Federally preempted areas of stand- ards for noise measurement or certification of aircraft.'* Moreover, as the Supreme Court noted in Burbank, 411 U.S. at 635, n. 14: “Airport owners acting as proprietors can presently deny the use of their airports to aircraft on the basis of noise considerations so long as such exclusion is nondiscriminatory.”’ In these circumstances, I find that the ALJ improperly enlarged the scope of this proceeding, thereby permitting ‘Challenges to the certification of an aircraft type may be raised by filing a complaint with the Administrator, pursuant to § 1002(a) of the FAAct; however, the Commission never did so. 48a the Commission to challenge the FAA’s noise standards for certification of the Q707, a Federally preempted subject matter. I have also concluded that the ALJ erred in allowing the extensive discovery which took place in this case and in admitting evidence that sought to dispute the FAA’s noise determinations. Although, as a practical matter, this error is legally harmless, since the data adduced by the discovery and introduced into evidence at the hearing, did not reveal any discrepancies in the FAA’s determination of the noise levels of the Q707 or the other aircraft with which it was compared, there is, nonetheless, reason to be concerned about the effect the ALJ’s discovery rulings may have on future cases. The broad discovery authorized by the ALJ is one of the principal reasons why this case has taken so long, and it is now clear that this discovery was totally unnecessary. More important, in view of the FAA’s statutory responsibilities in the areas of aircraft certification and noise control, considerable deference should be shown to its noise determinations; and discovery should be limited to situations where the requesting party demonstrates reason to believe the FAA’s data and con- clusions are incorrect. No such demonstration was made here. III. ALJ’S INITIAL DECISION On August 9, 1988, the ALJ issued his Initial Decision (“I.D.”), finding that the Commission’s exclusion-of Bur- lington’s Q707s was a violation of Assurance No. 20 of grant agreements entered into with the FAA under the 1970 Act, for the reason that the Commission had failed to operate the airport for the use and benefit of the public on fair and reasonable terms and without unjust discrim- ination. However, consistent with his earlier ruling con- cerning the scope of his jurisdiction under Part 13, the ALJ refused to extend this finding to assurances of grant 44a agreements the Commission had entered into under the 1982 Act. The ALJ based his decision on record evidence dem- onstrating that Stage 2 aircraft as noisy as, or noisier, than the Q707 had been permitted to operate at SFIA, and that these types of aircraft were allowed to commence and continue operations at SFIA under the Commission's regulations, while the Burlington Q707 was excluded. I.D. at 7-11. The ALJ further noted that notwithstanding liberal per- mission to the Commission, over the vigorous objections of other parties, to inquire into the FAA’s noise certifi- cation of the Q707, the Commission had failed to show any substantial flaw in the way the FAA had determined ‘the noise levels of the aircraft, with or without thrust cutback. I.D. 9-11. Because the question of what constitutes an unfair, un- reasonable or unjustly discriminatory action on the part of an airport proprietor, under the 1970 and 1982 Acts and related regulations, in excluding a particular aircraft type is a case of first impression for the FAA, the ALJ properly looked to relevant Federal case law, particularly, the Second Circuit Court of Appeals’ decisions in the so- called Concorde Cases (British Airways Board v. Port Au- thority of New York and New Jersey, 558 F.2d 75 and 564 F.2d 1002 (2d Cir. 1977) (Port Authority’s exclusion of the supersonic Concorde from operating at New York’s John F. Kennedy Airport in the late 1970’s was unrea- sonable and discriminatory because that aircraft satisfied the noise standards that the Port Authority had applied to subsonic aircraft). ai The ALJ rejected the Commission’s contention that its actions in excluding the Q707 were justified because it had a ‘‘rational belief’ that the Q707 was noisier than other Stage 2 aircraft and, thus, exclusion would reduce possible liability and enhance the quality of the environment, citing 45a a footnote in Santa Monica Airport Association v. City of Santa Monica, 659 F.2d 100, 104, n. 5 (9th Cir. 1981). However, the ALJ stated that it was not enough that the Commission may have “rationally believed’’ that the clas- sifications in its regulations might reduce the possibility of liability or enhance the quality of the environment. Rather, the ALJ concluded that these classifications must, in fact, be capable of achieving these purposes under an objective, not subjective, standard. I.D. at 19.) Applying this standard to the proceeding, the ALJ con- cluded that the Commission’s Resolutions did not bear a “rational relationship” to the twin goals that were outlined in the Santa Monica case. Specifically, he noted that the exclusion of the Q707 would not, in fact, reduce the Com- mission’s financial liability, or improve the environment, because it was continuing to allow noisier planes to operate at SFIA. I.D. at 16-18. The ALJ also rejected the Commission’s arguments that it was permissible to “ratchet down” the noise at SFIA by addressing noise problems on a piecemeal basis and that its exclusion of the Q707 was part of a legitimate form of “‘grandfathering,’’ whereby existing carriers would not be disturbed, but new entrants would be excluded; and comparable grandfathering had been upheld by the courts in cases arising under the Equal Protection Clause. I.D. at 23-25. The ALJ further found that Burlington’s decision not to seek a variance under the Commission’s new 1988 Res- olution did not preclude a finding that the 1988 Resolution was violative of Assurance No. 20. The ALJ noted that there is a limit beyond which Burlington no longer should be required to exhaust its administrative remedies. I.D. at 34-35. Based on his determination that the Commission’s ac- tions violated Assurance No. 20, the ALJ ruled that the FAA could continue to withhold the Commission’s funding 46a under the grant agreements entered into under the 1970 Act. However, consistent with his earlier rulings regarding the scope his jurisdiction under 14 C.F.R. Part 13, the ALJ refused to approve the withholding of funds under grants that had been entered into under the 1982 Act. The ALJ also declined to address the issue of whether the current temporary suspension of approval of the- Commis- sion’s grants subsequent to July 7, 1986 should be af- firmed. I.D. at 37-40. IV. APPEAL OF INITIAL DECISION The Commission appeals the ALJ’s determination that the Commission’s exclusion of Burlington’s Q707 aircraft, on the ground that the Q707 aircraft type had not been certificated as Stage 2 compliant and operated at San Francisco International Airport prior to January 1, 1985, as required by Commission Resolution'®, while at the same time permitting noisier or equally noisy aircraft models to continue or commence operations at the Airport, violated Assurance No. 20 of grant agreements entered into be- tween the Commission and the Federal Aviation Admin- istration, under the Airport and Airway Development Act of 1970, 49 U.S.C. § 1701 et seg., which require the Com- mission to operate the Airport for the use and benefit of the public on fair and reasonable terms and without unjust discrimination. The Commission also appeals the ALJ’s determination that continued exclusion of the Burlington Q707 aircraft under Commission Resolution 88-0016 (January 22, 1988) violated Assurance No. 20 of the grant agreements in the ‘Ss Included within this finding of unjust discrimination is the ALJ’s subsidiary determination that the Commission violated Assurance No. 20 by its refusal to grant a waiver of Resolution 78-0131 on the basis that the Q707 was significantly louder in takeoff mode than any other aircraft permitted to operate at SFIA. The record demonstrated that the Commission was incorrect. 47a same unfair, unreasonable, and unjustly discriminatory manner. The Commission contends that the ALJ’s findings are erroneous and result from a failure to properly apply the “rational basis’’ test, commonly used in challenges brought under the Equal Protection Clause of municipal regulations promulgated under police powers, to review the airport noise abatement regulations. The Commission asserts that under the rational basis standard, its exclusion of the Q707, pursuant to Resolution 78-0131, on the grounds that it was not Stage 2 certificated until after January 1, 1985, is rationally related to a permissible purpose—the Airport’s control of noise, particularly cumulative noise. Comm. Br. at 19-22.'° Moreover, asserting that its noise abatement resolutions are nothing more than ‘“‘economic regulations” (citing Santa Monica Airport Ass’n v. City of Santa Mon- ica, 481 F. Supp. 927, 935 (C.D. Cal. 1979), aff'd 659 F.2d 100 (9th Cir. 1981)), similar to regulations commonly en- acted by municipal authorities under their police powers (for the health and welfare of citizens), the Commission also argues that its decision not to grant Burlington a ‘6 Contrary to the Commission’s assertions on brief that exclusion of the Q707 was based on its policy of reducing cumulative noise impact, the record reveals that the Commission’s exclusion of the Q707 was based on its determination that the aircraft was louder in takeoff mode than any other aircraft at the Airport. The ALJ found that the evidence showed this determination was incorrect, and the Commission has ap- parently abandoned its contention that the aircraft’s takeoff noise ex- ceeded that of all other aircraft at SFIA. Indeed, the Commission concedes the correctness of the Initia. Decision’s factual findings that during the period the Q707 has been denied permission to operate at the Airport, 15 other models of aircraft, emitting as much or more noise than the Q707, have been permitted to operate there; and that operators of these airlines have been permitted to increase the number of flights with these aircraft types. The Commission also does not dispute that at least 560 takeoffs and landings are performed each month at SFIA by six aircraft models noisier than the Q707. I.D. at 10-11. 48a waiver of its Resolution excluding Stage 2 aircraft certif- icated after January 1, 1985 must be found reasonable and non-discriminatory under the Equal Protection Clause’s ra- tional basis test because of the Commission’s belief that the classification expressed by the resolution was rationally related to a permissible goal of abating airport noise. Comm. Br. at 27-28. Relying on New Orleans v. Dukes, 427 U.S. 297 (1976), the Commission asserts that under the rational basis test, deference to its ‘legislative’ determination regarding the desirability of its noise classification is required.'’ In Dukes, the Supreme Court describes tiie rational basis test for Equal Protection Clause challenges to municipal regula- tions enacted under police powers, holding that unless the classification trammels fundamental personal rights or is based on inherently suspect distinctions, the constitution- ality of such a classification is established with a showing only that it is rationally related to a-legitimate govern- mental interest. Jd. at 303. Given that test, the Commis- sion asserts, its classifications under Resolution 78-0113 cannot be found unreasonable, arbitrary, or discriminatory. The Commission’s reliance on the rational basis test is misplaced; and the fundamental error of the Commission’s argument is nowhere better demonstrated than by Dukes. As the Court explains, the rational basis test applies only ‘7 The Commission argues that its legislative classifications, 1.e., noise abatement resolutions, are entitled to the deference traditionally ac- corded legislative classifications enacted by Congress or state legisla- tures. This assertion is no more than another aspect of the Commission's misplaced reliance on Equal Protection Clause principals as the proper standard for review of its resolutions. The question is not the deference to be afforded the resolutions, but rather whether the Commission violated its contractual obligations by passing a discriminatory resolu- tion and applying it to exclude an operator from SFIA in an arbitrary and unreasonable way. Put another way, this proceeding is not a chal- lenge to the Commission’s capacity to promulgate resolutions, but rather an examination of whether that resolution is related to discriminatory behavior violative of a contractual obligation. 49a to Equal Protection Clause challenges to regulations pro- mulgated under a municipality’s police powers; the test is not valid where the challenged regulation was promulgated under other authority: We emphasize again that these principles, of course, govern only when no constitutional pro- vision other than the Equal Protection Clause itself is apposite. Very different principles govern even economic regulation when constitutional provisions such as the Commerce Clause are im- plicated, or when local regulation is challenged under the Supremacy Clause as inconsistent with relevant Federal laws or treaties. 427 U.S. 304, n. 5. In fact, the Commission’s noise control regulation im- plicates both the Supremacy Clause (see, e.g., City of Bur- bank v. Lockheed Air Terminal, 411 U.S. 624 (1973)), and the Commerce Clause (see, e.g., Santa Monica Airport Ass'n v. City of Santa Monica, supra; Concorde Cases, 558 F.2d 75 and 564 F.2d 1002 (2d Cir. 1977); Initial Decision at 16). It is well settled that the pervasive Federal scheme of regulation of airspace and air carriers, including noise control, preempts conflicting state and local laws. Burbank, supra, at 625. Similarly, state and local noise regulations found to be burdensome on interstate commerce are deemed in conflict with the Commerce Clause and are also invalid. Santa Monica, 481 F. Supp. at 937, quoting Pike v. Bruce Church, 397 U.S. 187, 142 (1970). However, within the Federally preempted control of aviation, Congress has concluded and the courts have con- sistently held that airport proprietors retain the authority and responsibility to regulate local operation of their air- ports, including noise, as long as there regulations are “reasonable, nonarbitrary, and nondiscriminatory.”” Bur- bank, 411 U.S. at 635-36, n. 14, and 649; British Airways v. Port Authority of New York (Concorde I), 558 F.2d 75, 50a 84; British Airways v. Port Authority of New York (Con- corde II), 564 F.2d 1002, 1011 (2d Cir. 1977). Thus, the promulgation of noise control regulations and actions pursuant to those regulations by the Commission under this ‘‘proprietor exception” is properly reviewed by determining whether they are reasonable, arbitrary, and discriminatory"*; not by the rational basis test applicable to Equal Protection Clause challenges. Consequently, the Commission’s argument that the ALJ erred by applying an improper standard of review is with- ‘8 At the heart of the Commission’s assertions of error regarding the Initial Decision’s finding of discrimination, perhaps at the heart of this protracted dispute, is the Commission’s apparent misunderstanding of the scope of its authority to regulave airport noise under the ‘‘propri- etor’s exemption.”” The Commission contends that as a proprietor, it has the authority to independently evaluate the noise levels of aircraft in regulating airport noise; and, despite conceding the FAA’s authority and responsibility to certificate aircraft compliance with Part 36 noise standards, asserts that it is not precluded from independently assessing aircraft noise levels and denying access to SFIA on the basis of those assessments. Comm. Br. at 47-48. The Commission is simply wrong. While is can regulate permissible levels of noise created by aircraft using SFIA, this local regulatory control does not include the power to invade federal regulation—in this case, the establishment and cert- ification of aircraft noise levels. Nor does is include the power to dis- criminate. Thus, the Commission could bar all aircraft noisier than Q707s, or establish a curfew for such aircraft, but it cannot deny access to a Q707 Stage 2 aircraft, when other similarly certificated aircraft are permitted to serve the airport, on the grounds that the Commis- sion’s independent assessment of the Q707’s noise levels led it to con- clude that the Q707 was noisier than the other aircraft. In support of its contention that it may independently evaluate noise levels as a proprietor, the Commission misconstrues 14 C.F.R. § 36.5, which states that: “‘[njo determination is made [under Part 36], that these noise levels are or should be acceptable or unacceptable for operation at, into, or out of, an airport.’’ This regulation is not the source of pro- prietor authority to independently assess aircraft noise levels. Rather, consistent with local regulation of airport noise, § 36.5 simply says that no airport must accept aircraft solely on the basis of Part 36 certifi- cation. 5la out merit. Although the ALJ may have had some confusion about the scope of the Commission’s noise control au- thority, the ALJ properly understood that the issue to be resolved was whether the Commission’s actions were dis- criminatory, as demonstrated by the evidentiary record and application of appropriate decisional law. In this re- spect, the ALJ’s reliance on the Concorde Cases was proper. In making the determination that unjust discrimination in violation of Assurance No. 20 was occurring, the ALJ found first that the Commission excluded the Q707 under its 1978 Resolution on the grounds that it had been retro- fitted to comply with Stage 2 standards after January 1, 1985. The ALJ further found that the Commission contin- ued that exclusion under its 1988 Resolution on the grounds that the Q707 was not a type of Stage 2 aircraft that had been operating at SFIA on or before January 1, 1985." '*The Commission offers a number of arguments in support of its 1978 and 1988 Resolutions that serve to illuminate only the Commis- sion’s singular understanding of the nature and extent of its proprietor exemption for noise control. For example, the Commission contends that the factual findings of its April 15, 1986 waiver denial are pre- clusive for purposes of this Order’s determination of whether the Com- mission violated its grant assurances. The Commission, however, misdefines this case. The issue to be decided is not whether the Com- mission should have granted the waiver, but whether the Commission has violated the terms of its grant assurances. Thus, the question of the accuracy or completeness of submissions by parties to the Com- mission during the waiver process are irrelevant, as are the specific fact findings associated with the waiver process. Neither affects the proceeding’s examination of all facts related to the question of dis- criminatory behavior in violation of grant assurances. Moreover, as fact finding, the April 15, 1986 waiver denial stands only for the proposition that the Commission’s denial of the Q707 waiver rests on facts dem- onstrated to be untrue by uncontroverted evidence in the instant pro- ceeding. Finally, the Commission’s contentions regarding its 1988 Resolution do not require significant further consideration. Initially, the Commission argued that having repealed its 1978 resolutions through passage of its 1988 Resolution, this proceeding had been mooted and 52a Exclusion of the Q707 based on the date of modification, rather than the date of complying operation is neither rational nor reasonable. The date of retrofit is irrelevant to the amount of noise an aircraft emits. Moreover, the Commission’s 1978 Resolution states that it incorporates FAR Part 36 and the implementation schedule of FAR Part 91, but these regulations do not distinguish among aircraft by date of retrofitting. In addition, the ALJ found the reason offered by the Commission for its exclusion of the Q707 by its denial of waiver to be arbitrary and unreasonable. The Commission denied a waiver on its conclusion that the Q707’s compli- ance with Part 36 Stage 2 standards was insufficient be- cause compliance was achieved by using thrust cutback on takeoff and a decibel tradeoff among the measuring points. Use of cutback and tradeoff are specifically permitted by Part 36 to achieve Stage 2 compliance,”° and exclusion of should be dismissed. In addition, the Commission also contends that Burlington failed to exhaust its administrative remedies by not seeking a waiver from the 1988 Resolution, and thus filed its complaint pre- maturely with the FAA. Even if exhaustion principals applied in the context of this alleged violation of Federal law, there is, as the ALJ found, a limit beyond which a litigant need not continue to engage in a process where there is no realistic hope for the sole purpose of exhausting administrative remedies. No one can doubt Burlington’s se- rious efforts to commence operations with its Q707s at SFIA—an effort to which it has devoted more than three years without success. More- over, the Commission fails to indicate, in any manner, that it would have ruled more favorably on requested waiver of its 1988 Resolution, than it did when it turned down Burlington’s requested waiver of the 1978 Resolution. *0 The use of tradeoffs and cutbacks to demonstrate compliance with Stage 2 standards is also addressed in § 305 of the Aviation Safety and Noise Abatement Act of 1979, 49 U.S.C. § 2125 et seg., which provides: ‘“‘Notwithstanding any other provision of law, or any rule or regulation or order... the provisions contained in Appendix C of Part 36 of Title 14... [thrust cutbacks on takeoff and decibel tradeoffs] shall apply in determining whether any aircraft complies with the provisions of Subpart E of Part 91. ...” 53a an aircraft type that complies with Stage 2 solely for the reason that compliance is achieved through the use of these provisions is inconsistent with Part 36 and, as the ALJ found, discriminatory. In fact, the evidence adduced in this proceeding shows that many models of certain of the air- craft types permitted to operate at SFIA utilize these pro- visions of Part 36 to achieve Stage 2 compliance, and that approximately 60% of all departures from the Airport in 1985 were performed by these aircraft types. FAA Counsel Notice, Exh, 14. Thus, the ALJ found that there was no discernible, rational basis for the treatment afforded the Q707 that was justified by the manner in which it achieved compliance with Stage 2 standards. Even considering only takeoff noise, the ALJ also found that 15 as noisy, or noisier, aircraft models were permitted to operate at the Airport. Exclusion of the Q707 in these circumstances made absolutely clear the Commission’s arbitrary and discrimi- natory action. Initial Decision at 10-11. The Commission’s attempts to justify its actions by con- tending that in addressing the Airport’s ‘“‘cumulative noise’ problem, it is permitted to “grandfather” other Stage 2 aircraft types already operating at SFIA, but deny access to similarly situated new applicants, under decisional au- thority permitting regulation by ‘‘racheting down,” relying on New Orleans v. Dukes, supra, and other cases upholding step-by-step legislative classifications promulgated pur- suant to municipal police powers.?! 21 “*Racheting down,” or a gradual approach, has been held consti- tutionally permissible, see generally, Katzenbach v. Morgan, 384 U.S. 641, 657 (1966) with respect, again, to local economic regulations chal- lenged under the Equal Protection Clause. New Orleans v. Dukes, 427 U.S. at 303-305. As previously noted, the Commission’s reliance on these cases is misplaced; Moreover, even were step-by-step or ‘‘rach- eting down’’ permissible, the method employed by the Commission in arguable pursuit of that practice cannot survive scrutiny under a rea- sonable, nonarbitrary, and nondiscriminatory test. Global International Airways v. Port of Authority, 727 F.2d 246 (2nd Cir. 1984), upon which 54a The Commission’s so-called ‘“‘grandfathering”’ of all ex- isting Stage 2 compliant aircraft at SFIA, while excluding a similarly compliant new entrant, is arbitrary and dis- criminatory. In this situation, the term “‘grandfather’’ is a misnomer, obscuring the plain fact that the only change is exclusion of a new entrant—an entrant less noisy than many of the “grandfathered’’ aircraft. In sum, the authority of airport proprietors to regulate aircraft noise is neither immune from scrutiny nor unlim- ited in scope, but subject to well-established restraints. The proprietor must exercise this authority reasonably, in a manner rationally related to achieving noise control, and through nonarbitrary, nondiscriminatory regulations that do not conflict with Federally preempted law or create a burden on commerce. After review of the record, the Initial Decision, and the briefs of all parties, I have concluded that the ALJ’s find- ing that the San Francisco Airport’s Commission’s exclu- sion of the Burlington Q707 was unjustly discriminatory and, thus, a violation of assurances contained in grant agreements between the Commission and the FAA, which require the Commission to operate the Airport on fair and reasonable terms and without unjust discrimination, is sup- ported by the record. Similarly, I have concluded that the record supports the related finding that continued exclu- sion of the Q707 by the Commission pursuant to Resolution 88-0016 also violates the relevant assurances for the same reasons. Therefore, I find that since October 17, 1985, and con- tinuing to date, the Commission has been and remains in the Commission relies, is not to the contrary. There, the court agreed that the power of states and localities to establish requirements re- garding noise created by aircraft using their airports included the right to deny the use of an airport to an aircraft, but only on the basis of nondiscriminatory noise criteria. Jd. at 251. 55a noncompliance and default of its grant agreement assur- ances by reason of its failure to operate SFIA on fair and reasonable terms and without unjust discrimination. V. REMEDY The ALJ concluded that the appropriate remedy for the Commission’s violation of Assurance No. 20 of grant agree- ments under the 1970 Act was confirmation of the FAA’s continuing suspension of funding under those grant agree- ments. This suspension had commenced with issuance of the July 7, 1986 Notice, and applied to funding beginning that date. However, on the basis of the ALJ’s August 13, 1987 ruling that he had no jurisdiction to consider charges under the 1982 Act, the ALJ expressly declined to address the question of whether the temporary suspension of ap- proval of 1982 Act Commission grant applications sub- mitted after July 7, 1986 should also be affirmed. While I affirm the remedy recommended by the ALJ under the 1970 Act, I find that the ALJ improperly de- clined to address the issue of the FAA’s suspension of pending or future grant approvals. Under current law, grants may not be approved unless the sponsor (here the Commission) makes satisfactory assurances prior to grant approval that it will operate an airport on “fair and rea- sonable terms and without unjust discrimination.’”’ See 49 U.S.C. § 2210. Since the ALJ concluded that the Com- mission had violated this standard, he should have affirmed the refusal to approve the Commission’s grant applications until the Commission modified its behavior, as, in the face of continuing discrimination, the prerequisite approvals upon assurances of non-discriminatory behavior cannot be made. Regardless of whether the Commission’s actions vi- olated the assurances in grant contracts entered into under the 1982 Act, the finding under the 1970 Act that the Commission is continuing to discriminate against Burling- ton by excluding the Q707 warrants, in fact necessitates, the disapproval of pending and future grants until and 56a unless the Commission cures the discrimination found by the ALJ and affirmed in this Decision and Final Order. FAA Counsel has not sought to withhold reimbursement of expenditures incurred by the Commission in connection with grant contracts previously entered into (under either the 1970 or 1982 Acts). Rather, the relief sought is pro- spective and preventive: to withhold approval of new grants during the period the Commission persists in discriminat- ing. It is appropriate, and I have determined to grant it.” ACCORDINGLY, pursuant to 14 C.F.R. § 13.20; and the authority contained in sections 313(a) and 1006 of the Fed- eral Aviation Act of 1958, as amended, 49 U.S.C. §§ 1354(a) and 1486; sections 18 and 27 of the Airport and Airway Development Act of 1970, 49 U.S.C. §§ 1718 and 1727; and sections 509(bX1), 511(aX1), and 519 of the Airport and Airway Improvement Act of 1982, 49 U.S.C. §§ 2208(b\1), 2210(a)1). 1. I find that the exclusion by the San Francisco Air- ports Commission under its Resolutions 78-0131 and 88- 0016 of the Q707 aircraft of Burlington Air Express from San Francisco International Airport to be a violation of the assurances in the grant agreements entered into be- tween the City and County of San Francisco and the Fed- eral Aviation Administration under which the City and County of San Francisco agreed to operate that airport for the use and benefit of the public on fair and reasonable terms and without unjust discrimination. 2. I affirm and finalize the temporary suspension of ap- provals of applications by the City and County of San Francisco for grant funds that has been in place since July 7, 1986 on the basis that the City and County of San Francisco has not provided satisfactory assurances that it 2 Thus, there is no need to remand issues regarding compliance with the 1982 Act and associated grants to the ALJ, since the relief granted by this decision would not be affected by the outcome of such a remand. 57a will operate the San Francisco International Airport for the use and benefit of the public on fair and reasonable terms and without unjust discrimination. 3. I direct that no further applications for grant funds under the Airport and Airway Improvement Act of 1982 at the San Francisco International Airport shall be ap- proved until the Commission complies with its grant ob- ligations. 4. Except as specifically reversed or modified herein, I affirm the Initial Decision (served August 12, 1988) of Chief Administrative Law Judge William A. Kane, Jr. is- sued in this proceeding. /s/ T. Allan McArtor 12/12/88 T. ALLAN McARTOR Date ADMINISTRATOR 58a APPENDIX D U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF HEARINGS WASHINGTON, D.C. DOCKET NO. 13-86-2 (FAA Enforcement) IN RE SAN FRANCISCO AIRPORTS COMMISSION INITIAL DECISION OF CHIEF ADMINISTRATIVE LAW JUDGE WILLIAM A. KANE, JR.* Served Upon: Steven S. Rosenthal, Morrison & Foerster, Suite 5500, 2000 Pennsylvania Avenue, N.W. Washington, D. C. 20006, for San Francisco Airports Commission. John W. Simpson, Kelley, Drye & Warren, Suite 600, 13380 Connecticut Avenue, N.W., Washington, D.C. 20036, for Burlington Air Express. Porter Goltz, Deputy County Counsel, County of San Mateo, County Government Center, Redwood City, Cali- fornia 94063. Robert Silverberg, Condon and Forsyth, 1100 15th Street, N.W., Washington, D.C. 20005, for Airborne Express and Southern Air Transport. * This Initial Decision is rendered pursuant to authority delegated to the administrative law judge under the Rules of Practice for Federal Aviation Administration hearings (14 CFR 13.37). A party may appeal this decision by filing a Notice of Appeal with the Administrator of the Federal Aviation Administration within 20 days after the date of service hereof pursuant to 14 CFR 13.20(g). 59a Stephen A. Alterman, Executive Vice President & Gen- eral Counsel, Air Freight Association, 1710 Rhode Island Avenue, N.W., Washington, D.C. 20036 Richard W. Danforth, Manager, Airports and Environ- mental Law Branch, Office of the Chief Counsel, Federal Aviation Administrations, 800 Independence Avenue, S.W., Washington, D.C. 20591. Found: 1. That the exclusion by the San Francisco Airports Com- mission of the Q707 aircraft of Burlington Air Express from the San Francisco International Airport is a violation of Assurance No. 20 of the grant agreements entered into between the San Francisco Airports Commission and the Federal Aviation Administration under the Airport and Airway Development Act of 1970 in that the Commission thereby failed to operate the airport for the use and ben- efit of the public on fair and reasonable terms and without unjust discrimination. 2. That the continued exclusion of the Q707 aircraft from the airport issued under Resolution 88-0016 of the San Francisco Airports Commission January 22, 1988, also vi- olates Assurance No. 20 of the said grant agreements for the same reasons. 3. That the actions of the Federal Aviation Administration withholding grant funds for failure to comply with Assur- ance No. 20 of the grant agreements entered into under the Airport and Airway Development Act of 1970 are af- firmed. [Table of Contents Omitted in this printing] 60a INITIAL DECISION OF CHIEF ADMINISTRATIVE LAW JUDGE WILLIAM A. KANE, JR. I. Introduction This proceeding was initiated by the filing on July 7, 1986, by the Assistant Chief Counsel of the Federal Avia- tion Administration (FAA Counsel) of a Notice of Proposed Cease and Desist Order. The Notice, which was filed under the FAA Investigation an! Enforcement Procedures, 14 CFR Part 13, charged the San Francisco Airports Com- mission (Commission) with violation of various statutes and grant agreements entered into between FAA and the Com- mission for failure to permit Burlington Air Express, Inc. (Burlington), a certificated air carrier of cargo, to operate Stage 2-compliant Boeing Q707 aircraft which it leased from Southern Air Transport, Inc. (SAT), at San Francisco International Airport (SFIA). The undersigned was as- signed to the proceeding on August 27, 1986. Little significant action occurred on the record in the case for the next seven months while FAA Counsel, the Commission, and various prospective interveners, including Burlington, attempted to stipulate various matters in order to expedite the proceeding. They were able to reach a stipulation of various procedural matters which the judge adopted, but they failed to reach any stipulations of fact. On March 17, 1987, a petition by Burlington to intervene as a full party was granted. At the same time, the Air Freight Association, Airborne Express, Southern Air Transport and the County of San Mateo were granted the right to intervene not as full parties but on a limited basis. On March 13, 1987, the Commission filed a motion to dismiss or strike FAA’s Notice of Proposed Cease and Desist Order. FAA Counsel and Burlington filed replies to this motion and all three parties filed sur-replies. On August 13, 1987, the undersigned issued an order granting in part the Commission’s motion to dismiss and ordering the case to proceed to hearing on one of the issues. 6la Petitions for reconsideration of that order were filed and on November 3, 1987, the judge vacated much of the Au- gust 13, 1987 order. As formulated by the judge in the November 3, 1987 order, and pursuant to an amendment to the FAA Counsel’s July 7, 1986 Notice authorized by the judge,’ the issues being tried in this care are (1) whether the actions of the Airports Commission between October 17, 1985 and April 15, 1986, excluding the Bur- lington Q707 from SFIA on grounds that an aircraft of its type had not been certificated as Stage 2-compliant and operated at SFIA before January 1, 1985, while permitting other noisier aircraft to continue and commence operations at SFIA was unfair and unreasonable and unjustly dis- criminatory within the meaning of Assurance No. 20 of the grant agreements entered into between the Commis- sion and the Federal Aviation Administration under the Airport and Airway Development Act of 1970, and (2) whether the Commission’s subsequent adoption of Reso- lution 88-0016 of January 22, 1988, continuing to exclude that aircraft under the same circumstances also violates Assurance No. 20. The proceedings in this case have been unusually lengthy. There was oral argument on motions before the administrative law judge (ALJ) in November 1987. There was a two-day prehearing conference on February 9-10, 1988, and a further prehearing conference on March 21, 1988. There have been a large number of motions and orders and extensive discovery has taken place in Wash- ington and at various locations on the West Coast. Sub- poenas issued by the ALJ have been enforced by the U.S. District Court for the District of Celumbia. Eight days of hearing were held before the administrative law judge in San Francisco, California, between May 2 and May 11, ‘In the amendment, FAA Counsel withdrew its request for a cease and desist order and confined the requested relief to affirmation of its action withholding of suspending grant funds. 62a 1988, at which 20 witnesses were heard. These included leading aviation acoustical experts within the Federal Gov- ernment testifying on behalf of FAA Counsel and outside of the government testifying on behalf of Burlington and the Commission. Briefs were filed on May 26, 1988. Burlington and FAA Counsel take the position that the Commission’s actions violate Assurance No. 20. The Com- mission denies the violation on the grounds set forth be- low. SAT, owner of the Q707s, who leases them to Burlington, endorses Burlington’s position, but has also filed a brief vigorously excepting to the scope of discovery and inquiry permitted by the administrative law judge into the certification basis of the Q707. The County of San Mateo filed a brief strongly endorsing the Commission’s exclusion of the Q707. The matter is now ready for de- cision by the administrative law judge.’ Il. Background In November 1984 SAT on behalf of Burlington acquired eight previously-owned B707-300 series cargo aircraft. Six of these had been out of operation prior to their sale to SAT (Ex. BAX-PH-204). SAT’s plan was to retrofit the aircraft with hush kits to be furnished by the Tracor/ Shannon Companies. On March 6, 1985, FAA issued a supplemental type certificate for the first of SAT’s re- trofitted aircraft finding that it complied with the Stage 2 noise standards contained in FAR Part 36. By April 16, 1985, seven of these aircraft, now designated as Q707s, had been fitted with the hush kits (Notice Ex. 6) and cer [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_2200%3A1. Public record. Not legal advice.