Petition for Writ of Certiorari — Montauk-Caribbean Airways, Inc. v. Hope

Supreme Court brief1986

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85-2102. | FILED

No.

Supreme Court, U.S.

IN THE i CLERK

Supreme Court of the Bnited States

OCTOBER TERM, 1985

MONTAUK-CARIBBEAN AIRWAYS, INC.,

d/b/a LONG ISLAND AIRLINES,

Petitioner,

JUDITH HOPE, et al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

R. TERRENCE NEY

THOMAS F. FARRELL, II

BOOTHE, PRICHARD & DUDLEY

8280 Greensboro Drive

McLean, Virginia 22102

(703) 356-2200

Counsel of Record

Counsel for Petitioner

Of Counsel:

I. LEONARD FEIGENBAUM

425 Broadhollow Road

Melville, New York 11747

Date: June 25, 1986

PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203

QUESTIONS PRESENTED

1. Whether a municipality, pursuant to a general

grant of authority from a state to operate an airport,

may refuse to permit an air carrier to use the airport

and those facilities required for its operation as an

air carrier?

2. Whether an air carrier may privately enforce

violations of the federal aviation laws where such vi-

olations amount to improper discriminatory treat-

ment?

3. Whether local government antitrust immunity-

from injunction can be predicated on a state statute

which while expressive of competitive displacement is

nonetheless violative of federal laws?

LIST OF PARTIES

The parties to the proceedings below were the

petitioners Montauk-Caribbean Airways, Inc., d/b/a

Long Island Airlines,| and the respondents Judith

Hope, Randall Parsons, Anthony Bullock, Michael J.

Finazzo, and Hugh King, Individually and as the Town

Board of the Town of East Hampton, New York,

Charles T. Smith, Russell Stein, East Hampton Aire,

Inc., and Frank LaVigna.

\Petitioner Montauk-Caribbean Airways, Inc., d/b/a Long Is-

land Airlines, is privately owned by A. R. Landsman who holds

50% of the stock and Budd Levinson who holds 50% of the

stock and has no parent companies, subsidiaries, or affiliates to

list pursuant to Rule 28.1.

iii

TABLE OF CONTENTS

NE INIT 5s. scccacssiscseiissnsancesossoneronceces

ES TE SAT OCTET TOO TTD

OPINIONS BELOW ...........cccsceeeee “AR SC ene

TEES <TR a

REASONS FOR GRANTING WRIT .......cccccocccccoceccccceeeee

IIT.

The Federal Aviation Laws Prevent A Mu-

nicipality, Acting Pursuant To A General

Grant Of State Authority, From Refusing A

Carrier Landing Rights And The Furnishing

Of Services Incidental To Those Rights .......

Protection Against Non-Discrimination Pro-

vided By The Federal Aviation Laws May Be

Privately Enforced By An Air Carrier ........

A. MCA May Sustain A Claim Pursuant to

MEE SN ME Skis clstnindsiiiciisinincxendndeadebcesoese

B. 49 U.S.C. § 2210 Provides A Private Right

I a nia ieacttlnteaapinctadinins

The Town’s Activities Are Not Protected

From Injunction Under The State Action Doc-

I ili ntietelalcctncuabosistits vesclbibeckcinsorkacicocssereseas

APPENDICES:

APPENDIX A. COMPLAINT ...0.06.cccccccccoscccccscocccceccesss

APPENDIX B. May 28, 1985, DEcISION ofr HENRY

BRAMWELL, UNITED STATES

DISTRICT JUDGE FOR THE EASTERN

DISTRICT OF NEW YORK ...0.....000000--

APPENDIX C.

APPENDIX D.

APPENDIX E.

APPENDIX F.

APPENDIX G.

APPENDIX H.

APPENDIX I.

APPENDIX J.

SEPTEMBER 4, 1985, DECISION OF

HENRY BRAMWELL, UNITED STATES

DISTRICT JUDGE FOR THE EASTERN

DISTRICT OF NEW YORK .........000+0+

FEBRUARY 14, 1986, OPINION OF THE

UNITED STATES COURT OF APPEALS

For THE SECOND’ CIRCUIT,

MoNTAUK-CARIBBEAN AIRWAYS, INC.

v. JupirH Hopr, et al., 784 F.2d 91

(2d Cir. 1986) ...ccccccccccsesocccssrccesscoese

ORDER DATED MARCH 27, 1986, OF

THE UniTeD STATES CourT OF

APPEALS For THE SECOND CIRCUIT

DENYING THE PETITION FoR

PRATT insikcictnnsidertsscaintiaternsine

FEDERAL AVIATION ADMINISTRATION

LETTER TO RANDALL T. PARSONS OF

JANUARY 12. 19B4 ...ccrcrcccccesessccceces:

FEDERAL AVIATION ADMINISTRATION

LETTER TO RUSSELL S. STEIN DATED

NOVEMBER 21, 1984 .............00..cc000

FEDERAL AVIATION ADMINISTRATION

LETTER To RussELL S. STEIN

DATED JANUARY 7, 1985. ...............

FEDERAL AVIATION ADMINISTRATION

LETTER To SANFORD M. LITVACK

DATED APRIL 9, 1985. .............cccecees

RELEVANT STATUTES. ..........cccccceceeees

22a

3la

45a

47a

49a

5la

TABLE OF AUTHORITIES

CASES: Page

Arrow Air, Inc. v. Port Authority of New York, 602

Fy MO: SEG GE TIIA.T. WOR) ccsccessciccccceneseoneee 21

Balf Co., Ine. v. Gaitor, 5384 F. Supp. 600 (D. Conn.

apa PE ERS eT sg 7 1 A 11

Beckham v. New York City Housing Authority, 755

Ge BOTS CBG CU, TIT) osnecccccisccceccscoscessnees 10

Boatowners and Tenants Ass’n, v. Port of Seattle,

716 F.2d 669 (Sth Cir, 1988) ............ccccccccesee 11

British Airways Board v. Port Authority of New

York, 564 F.2d 1092 (2d Cir. 1977) .0........... 17, 20

Britt v. San Diego Unified Port Authority of New

ORR, GEE UB. BUD OTT) ao nccbecccissnccciccccsebcccs 21

Chapman v. Houston Welfare Rights Organization,

Sa Ria er Re seeabddiisisa selec tasacinseccaoiadc, 10

City of Burbank v. Lockheed Air Terminal, Inc., 411

aes I siskickdshndidesbansipcidtlatnegkans 17

City of Dallas v. Southwest Airlines Co., 371 F. Supp.

CIE IID « ciiss Scoarncenneatpiaspaszuoeeie 8, 18

City of Lafayette v. Louisiana Power and Light Co.,

ek SU eee oe 16

City of Pompano Beach v. F.A.A., 774 F.2d 1529

(Re Ae CHI ibibshbclsscsisti sida ceiichoastceamlocuchis 8, 12, 18

Community Communications Co. v. City of Boulder,

Se AR PEE | osc cdiciidccnnedetidrsiietanodebueaiias 16

Conley v. Gibson, 355 U.S. 41 (1957) oo.ceeeeceeeeeees 9

Cook & Nichol, Inc. v. Plimsoll Club, 451 F.2d 505

a’ kl... EC ee area 9

Cort v. Ash, 422 U.S. 66. (1975) .c......0.cccccecscesceees 12, 14

Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 6 L. Ed.

ee Qa > Salbeensisasiasnarsnsblasertbrbadasedsinadicnneteie loos 17

Global International Airways Corp. v. Port Author-

ity of New York, 727 F.2d 246 (2d Cir.) pee 21

Table of Authorities Continued

Page

Guthrie v. Genesee County, New York, 494 F. Supp.

SED CF Des ho: SIE | codaintch vassteiininscinessteseciesecs 7

Hill Aircraft & te | Corp. v. Fulton County, 561

F. Supp. 667 (N.D. Ga. 1982) .........ceeeeeeeeeeeees 7

Maine v. Thiboutot, 448 U.S. 1 (1980) ........... eee 9

Merrill, Lynch, Pierce, Fenner & Smith, Inc. v. Cur-

rene, GEE Te CR tachdtascnnetssccsssenssscs... 10

Middlesex County Sewage Auth. v. National Seaclam-

mers Ass’n., 458 U.S. 1 (1981) — ............ceeeeeeees 10

National Aviation v. City of Hayward, 418 F. Supp.

G27 CED. CO, VOTE) cvcscaseinctecsercsvccvcesécveccesovees 21

New York Airlines, Inc. v. Dukes County, 623 F.

Supp. 1485 (D.C. Mass. 1985) ..........cceeeeeee passim

Niswonger v. American Aviation, Inc., 411 F. Supp.

TOD (HD. THe: TIT asescntetccnniccsnsececceseccecsens

Parker v. Brown, 317 U.S. 341 (1943) _ ................. 16

Pennhurst State School and Hospital v. Halderman,

ik Qe: | Reel eee eure 10

Pinehurst Airlines, Inc. v. Resort Air Services, Inc.,

476 F. Supp. 543 (M.D.N.C. 1979) — ........seeeee 3

San Diego Unified Port District v. Gianturco, 651

PO TOE: Cie CI. RED | enserivccscenpbensedycscscess. 17

San Diego Unified Port District v. Superior Court,

136 Cal. Rptr. 551 (Cal. Dist. Ct. App.

RIFT AD .. dninsenerthicnnseverticsnmniniininedianmidmniptimanstes 21

Santa Monica Airport Ass’n v. City of Santa Monica,

659 F.2d 100 (9th Cir. 1981) ..................0000008 21

Stepanischen v. Merchants D h Transportation

Corp., 722 F.2d 922 (1st Cir. 1983) _ .............. 7

Touche & Ross Co. v. Reddington, 442 U.S. 560

ERIITIE . . .veconeressnanstamnsiildbbeudishalleaintanageininaletaewcsi 10

Town of Hallie v. City of Eau Claire, __ U.S. —__,

oS We 3: nro: 16

United States v. County of Westchester, 571 F. Supp.

17, 20

BD COR BEG FSD. crntpaoeentsenonnveosahecnsssntessonen

vii

Table of Authorities Continued

Page

United States v. State of New York, 552 F. Supp.

WP SINS HIME shnissassestiveneiaasscccctiesin. 17, 21

CONSTITUTIONS, STATUTES AND RULEs:

ote i: BUG VE, aici civieiecsetccceseccsoccne. 17

PT rindi 2, 16, 20

RPM TT het cee ae 2, 16, 20

readies co, i, Se eR AER ER Glee 2

I a mo ae

A re I ii oe oR oe iki 2

UN RIE Sik nlncstncssniikaee es etd passim

I ailing che liisctasseleee el kn passim

so 2, 14

I tk 11

Oe IID edatnacdctitcbbidcucieintaiitiee cid ucas t. 6, 7

OD TT BOD nicccvanss.. spiteaaleincaaiiatibibiyy dia tasks passim

at in eg = NN CPR 5, 8

N.Y. Gen. Mun. Law §§ 350-357 (McKinney 1974

Ts ROE BGD nas. ccsesahccsaccssiccckacscsceeee: 16, 17, 18

MISCELLANEOUS:

H.R. Rep. No. 94-594, 94th rep 2d Sess., re-

printed in 1976 U.S. Code Cong. & Ad. News

OO Winks dhiahitcsismaleinhaaihaaraniedeniteddhibabiaaliedcitidaess 7, 13

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1985

MONTAUK-CARIBBEAN AIRWAYS, INC.,

d/b/a LONG ISLAND AIRLINES,

Petitioner,

Vv.

JUDITH HOPE, RANDALL PARSONS, ANTHONY

BULLOCK, MICHAEL J. FINAZZO, and HUGH KING,

Individually and as The Town Board of the Town

of East Hampton, CHARLES T. SMITH, RUSSELL

STEIN, EAST HAMPTON AIRE, INC., and FRANK

LAVIGNA,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

The petitioner Montauk-Caribbean Airways, Inc., d/

b/a Long Island Airlines, respectfully prays that a

writ of certiorari issue to review the judgment and

opinion of the United States Court of Appeals for the

Second Circuit, entered in the above-entitled pro-

ceeding on February 14, 1986.

OPINIONS BELOW

The opinion of the Court of Appeals for the Second

Circuit is reported at 784 F.2d 91, and is reprinted

in Appendix D hereto.

The memorandum decisions of the United States

District Court for the Eastern District of New York

(Bramwell, D.J.) have not been reported. They are

reprinted in Appendices B and C hereto.

JURISDICTION

Invoking federal jurisdiction and alleging violations

of 15 U.S.C. $$ 1, 2, 15 and 26, the Federal Aviation

Act, 49 U.S.C. §§ 1305, 1349%a), 2210(a), the Civil

Rights law, 42 U.S.C. § 1983, the petitioner brought

this suit in the Eastern District of New York. On

May 28, 1985, the Eastern District granted motions

of the Town defendants to dismiss the complaint for

failure to state a claim, but left open the petitioner’s

Sherman Act claims. On September 4, 1985, the East-

ern District granted the Town defendants’ motion to

reargue and dismissed the complaint.

On petitioner’s appeal, the Second Circuit on Feb-

ruary 14, 1986, entered a judgment affirming the

Eastern District’s orders. A petition for rehearing

was sought and denied by order of March 27, 1986.

The jurisdiction of this Court to review the judg-

ment of the Second Circuit is invoked under 28 U.S.C.

§ 1254(1).

STATUTES INVOLVED

The statutes involved in this case are 49 U.S.C.

1305, 49 U.S.C. § 2210 and 42 U.S.C. § 1988, copies

of which are reproduced at Appendix I.

STATEMENT OF THE CASE

This case concerns the attempt of a municipality to

restrict and control scheduled commercial airline ser-

vices in violation of the Constitution and federal stat-

utes.

Montauk-Caribbean Airways, Inc., d/b/a Long Is-

land Airlines (“MCA”) is a New York corporation

engaged in the business of a commercial air carrier.

Since the early 1960s, it has so operated out of the

East Hampton, New York Airport. Up until 1978 it

also operated as the sole fixed base operator (“FBO’’)

from that airport.

An FBO is an entity which provides services for

aircraft, including fuel, maintenance, tie downs, park-

ing and so forth. Pinehurst Airlines, Inc. v. Resort

Air Services, Inc., 476 F. Supp. 543 (M.D.N.C. 1979).

An air carrier by contrast, provides passenger trans-

portation, ticketing for such passengers, and requires

the services of an FBO to accomplish these activities.

While totally distinct, an air carrier cannot operate

without an FBO.

In 1978 defendant East Hampton Aire, Inc.

(“EHA”) also began acting as an air carrier and FBO

at the East Hampton Airport. In 1979 MCA entered

into a new lease with the Town which relieved MCA

of its prior obligation of providing FBO services on

a daily basis for twelve months of the year. The lease

provided instead that MCA would be required to fur-

nish FBO services “every day of each year except

for the period from October 1 to April 30 of each

year.”

Even though MCA was relieved of having to pro-

vide FBO services for seven months of the year, MCA

contends that it is still entitled to operate as an air

carrier and FBO from the airport on a year-round

basis as it had done for the previous vears. Put dif-

ferently, the new lease did no more than specify a

guaranteed minimum period for FBO services by

MCA; it did not exclude FBO services—much less air

carrier services—for the entire year. Even so, the

Town Board has prohibited MCA from operating on

a year-round basis. Only EHA is permitted by the

Town to use the facilities necessary for support ser-

vices year round.

The dispute between MCA and the Town has in-

tensified since 1982 with the result that MCA was

advised in October of 1984 that it was in violation of

the terms of its lease and ordered to cease all op-

erations. Thereafter, MCA filed a complaint with the

Federal Aviation Administration (“FAA”) alleging

that the Town of East Hampton had discriminated

against it. In 1985, after an informal investigation,

the FAA found in favor of MCA, but the Town has

taken no action.

In November 1985 the Town changed its position

and conceded MCA’s right to fly in and out of the

East Hampton airport. (Until then MCA was prohib-

ited by the Town from flying into East Hampton for

more than five months a year.) Notwithstanding, the

Town continued to refuse to permit MCA to support

its business by the use of facilities for on-ground ser-

vices such as ticketing, aircraft tie-downs, fueling and

so forth.2 The overall result of denying MCA these

2 The Town’s refusal was temporarily enjoined by the Second

Circuit. The injunction was dissolved on February 14, 1986 and

the Town is again trying to prohibit MCA’s use of the airport

facilities necessary for passenger services.

facilities would be the destruction of MCA as an air

carrier at East Hampton. MCA cannot solicit and

encourage business without direct contact with its

passengers at the East Hampton airport. If MCA’s

passengers have to purchase tickets, deliver and re-

ceive their baggage, and accept other services from

EHA—MCA’s sole competitor at East Hampton—and

MCA must depend on EHA for its aircraft fuel, then

MCA will be totally and completely precluded from

operating as an air carrier at East Hampton.

As a direct result of the earlier prohibition against

year-round flying into East Hampton, MCA’s share

of the passenger travel shrunk from forty-four per-

cent in 1980 to eleven percent in 1984. The Town’s

refusal to permit MCA to use the necessary facilities

to service its passengers at East Hampton will further

severely and irreparably harm MCA. All of this ac-

tivity inures to the sole benefit of EHA, the only

other carrier servicing the Town of East Hampton.

The ultimate result is that the air carriers which com-

pete for passenger business into and out of East

Hampton, New York are determined not by market

forces—as required by deregulation—but by the Town

Board of East Hampton.

REASONS FOR GRANTING THE WRIT

I. The Federal Aviation Laws Prevent A Municipality,

Acting Pursuant To A General Grant Of State Au-

thority, From Refusing A Carrier Landing Rights

And The Furnishing Of Services Incidental To Those

Rights

The Second Circuit sustained the Eastern District’s

dismissal of the Complaint? on the grounds that while

3 Pursuant to FED. R. CIV. P. 12(b)6.

the Federal Aviation Laws may provide protection to

MCA, MCA privately could not assert those rights.

This holding was erroneous for several reasons. More-

over, if the decision is permitted to stand, it effec-

tively will create a Civil Aeronautics Board at every

municipal airport in the country from which there is

no administrative or judicial review. Clearly that was

not the intent of Congress.

Section 511(a) of the Airport and Airway Improve-

ment Act of 1982 (“AIP’’) provides that:

[I]n a project grant application submitted un-

der this Title, the Secretary should receive

assurances, in writing, satisfactory to the

Secretary, that—

(1) the airport to which the project relates

will be available for public use on fair and

reasonable terms and without unjust discrim-

ination, including the requirement that (A)

each air carrier using such airport ... shall

be subject to such nondiscriminatory and sub-

stantially comparable rates, fees, rentals, and

other charges in such nondiscriminatory and

substantially comparable rules, regulations,

and conditions, as are applicable to all such

air carriers which make similar use of such

airport and which utilize similar facilities. . . .

(2) there will be no exclusive right for the

use of the airport by any person providing,

or intending to provide, aeronautical services

to the public....

49 U.S.C. § 2210(a).

The predecessor to § 2210(a), 49 U.S.C. § 1718

(originally enacted in 1970), was amended in 1976 to

specifically include air carriers and fixed-base opera-

tors. The statute identifies air carriers as among the

class Congress intended to benefit by passage of the

Act. New York Airlines, Inc. v. Dukes County, 623

F. Supp. 1435, 1446 (D.C. Mass. 1985); ef. Stepan-

ischen v. Merchants Despatch Transportation Corp.,

722 F.2d 922 (1st Cir. 1983). But see Hill Aircraft

Leasing v. Fulton County, 561 F.Supp. 667 (N.D. Ga.

1982), aff'd without opinion, 729 F.2d 1967 (11th Cir.

1984); Guthrie v. Genessee County, New York, 494

F.Supp. 950 (W.D.N.Y. 1980).

The legislative history of 49 U.S.C. § 1718 provides

that Congress intended to recognize “the legitimate

interest of air carriers and fixed-based operators in

development at airports.” H.R. Rep. No. 94-594, 94th

Cong., 2d Sess., reprinted in 1976 U.S. Code Cong.

& Ad. News 1600, 1614; New York Airlines, 623 F.

Supp. at 1446.

The amendments to § 1718 were intended to require

airport sponsors to “accord ... rights of consulta-

tion” to air carriers in making decisions to undertake

airport development. Further, the section as amended

prohibited sponsors [here the Town] from charging

discriminatory rates, fees, rentals and other charges

which “make the same or similar uses of such airport

utilizing the same or similar facilities.” Id. See dis-

cussion in New York Airlines, 623 F. Supp. at 1447.

As Judge Wolf concluded in New York Airlines:

Although the specific concern of Congress

was with discrimination against supplemental

carriers, the language adopted in the amend-

ment [to § 1718] comprehensively includes all

air carriers using the airport. The legislative

history therefore indicates that Congress in

enacting the statute intended to benefit air

carriers by imposing the requirement on air-

port operators that carriers be subject to

nondiscriminatory and substantially compa-

rable treatment.

623 F. Supp. at 1447.

Importantly, 49 U.S.C. § 2210(a) uses mandatory

language in its proscriptions. Airport operators are

required to insure that the airport “will be available

for public use on fair and reasonable terms and with-

out unjust discrimination. ...” 49 U.S.C. § 2210(a\1).

Further, the statute specifically provides that “there

will be no exclusive right” for the use of an airport.

49 U.S.C. § 2210(aX2).

This language describes far more than a Congres-

sional preference; rather, it expresses a Congressional

intent to bar exclusive rights to the use of airport

facilities absent extraordinary circumstances. New

York Airlines, 623 F. Supp. at 1447. Accord: City of

Dallas v. Southwest Airlines Co., 371 F. Supp. 1015

(N.D. Tex. 1973), aff'd, 494 F.2d 773 (5th Cir. 1974),

cert. denied, 419 U.S. 1079 (1974), reh’g denied, 420

U.S. 913 (1975); City of Pompano Beach v. FAA, 774

F.2d 1529 (11th Cir. 1985); Niswonger v. American

_ Aviation, Inc., 411 F. Supp. 769 (E.D. Tenn.), aff'd

529 F.2d 526 (6th Cir. 1975). Yet here, as a result

of the two decisions of the lower courts, MCA has

been denied even an opportunity to require the Town

to show such extraordinary circumstances.‘

« MCA’s case was dismissed on a Rule 12(b)6 motion for failure

to state a claim. Such motions should not be granted unless it

Here, exclusive rights to the airport—by denying

MCA use of the facilities necessary for its support

services— have in effect been granted EHA to the

detriment of MCA. It is clear that 49 U.S.C. § 2210

bars the activities engaged in by the Town. Despite

the plain intent of Congress—and the clear supremacy

of the federal law over state, much less municipal,

regulations—MCA remains excluded from East

Hampton Airport without even having had its day in

court.

II. Protection Against Non-Discrimination Provided By

The Federal Aviation Laws May Be Privately En-

forced By An Air Carrier

A. MCA May Sustain a Claim Pursuant to 42 U.S.C. § 1983.

The District Court and the Second Circuit both held

that MCA could not sustain its cause of action for

violations of § 2210 pursuant to 42 U.S.C. § 1983.

Those rulings were in error.

In Maine v. Thiboutot, 448 U.S. 1 (1980), this Court

held that §1983 “broadly encompasses violations of

federal statutory as well as constitutional law.” 448

U.S. at 4. Following Thiboutot, this Court defined

only two types of circumstances in which a § 1983

remedy is not available:

(i) whether Congress [intended to prohibit

private enforcement of [a] statute in the en-

actment itself, and

appears to be a certainty that the plaintiff would not be entitled

to recover under any state of facts which could be proved in

support of his claim. Conley v. Gibson, 355 U.S. 41 (1957); Cook

& Nichol, Ine. v. Plimsoll Club, 451 F.2d 505 (5th Cir. 1971).

EEN nnn

(ii) whether the statute at issue [is] the kind

that create[s] enforceable “rights” under

§ 1983.

Middlesex County Sewage Auth. v. National Seaclam-

mers Ass’n., 453 U.S. 1, 19 (1981); Pennhurst State

School and Hospital v. Halderman, 451 U.S. 1, 28

(1981), rev’d on other grounds, 465 U.S. 89 (1984). .

The Second Circuit relied upon these decisions in find-

ing that ‘the comprehensive enforcement scheme pro-

vided in the Federal Aviation Act manifests

Congressional intent to foreclose an action under

§ 1983.” See Appendix D. That decision is simply in-

correct and contrary to the Second Circuit’s own de-

cision in Beckham v. New York City Housing

Authority, 755 F.2d 1074 (2d Cir. 1985).

The analysis to be applied in making a determi-

nation as to whether a § 1983 action is available is

similar to the analysis relating to implied rights of

action because in both a party must demonstrate the

existence of a federal right which may be judicially

enforced. Merrill, Lynch, Pierce, Fenner & Smith,

Ine. v. Curran, 456 U.S. 353, 377-78 (1982); New York

Airlines, Inc., 623 F. Supp. at 1444. The ultimate

test is one of determining legislative intent. See Cur-

ran, 456 U.S. at 377-78; Touche & Ross Co. v. Red-

dington, 442 U.S. 560, 575-76 (1979); New York

Airlines, 623 F. Supp. at 1445.

MCA does not dispute that § 1983 is a remedial

statute that does not itself give rise to any substan-

tive rights. Chapman v. Houston Welfare Rights Or-

ganization, 441 U.S. 600 (1979). A plaintiff must show

that the statute violated is one that confers a federal

right. Whether this Court applies a test requiring that

a plaintiff demonstrate it is ‘‘an intended beneficiary”’

of the program, Balf Co., Inc. v. Gaitor, 534 F. Supp.

600, 605 (D. Conn. 1982), aff'd, 709 F.2d 1235 (9th

Cir. 1983), vacated on other grounds, 465 U.S. 1095

(1984), or that the plaintiff must show a benefit sim-

ilar to that required to establish a private right of

action, Boatowners and Tenants Ass’n. v. Port of Se-

attle, 716 F.2d 669, 673 (9th Cir. 1983), the facts

presented in the Complaint demonstrated that MCA

asserted such a right and that it should be permitted

to put on its proof.

As stated, § 2210(a) clearly intended to confer rights

upon air carriers and fixed-based operators. See dis-

cussion, supra, at pp. 5-9. Also, as noted, the statute

makes use of mandatory language requiring airport

operators to insure that the airport “will be available

for public use on fair and reasonable terms without

unjust discrimination” as well as providing that ‘‘there

will be no exclusive right” for the use of airport

facilities. 49 U.S.C. §§ 2210(aX1) and 2210(a\2).

The Second Circuit ruled that the “comprehensive

enforcement scheme” of the Federal Aviation Act

manifested Congressional intention to foreclose an ac-

tion under § 1983. Section 2210, however, doés not

arise under the Federal Aviation Act; rather, it was

a provision of the Airport and Airway Improvement

Act of 1982. The latter act contains no independent

enforcement mechanism. Further, 49 U.S.C. § 1506

[$ 1106 of the Federal Aviation Act] specifically pro-

vides that the statutory remedies provided therein are

not intended to be exclusive.

Based upon this reasoning, MCA has stated facts

at the very least sufficient to overcome a motion to

dismiss. MCA has alleged that it was denied the right

to make use of the Town airport year-round because

of the Town’s decision to protect an already existing

carrier. That was deemed sufficient to state a cause

of action in New York Airlines, 623 F. Supp. at 1448.

It is sufficient here as well. This is particularly true

in view of the fact that the Federal Aviation Admin-

istration explicitly found that the town was discrim-

inating against MCA in refusing to permit it to

operate year-round. See Letter of Thomas C. Hal-

loran, Regional Counsel, dated January 7, 1985, Ap-

pendix H. See also City of Pompano Beach v. F.A.A.,

774 F.2d 1529 (11th Cir. 1985).

B. 49 U.S.C. § 2210 Provides a Private Right of Action.

In addition to being permitted to assert its claims

arising out of the protections accorded by 49 U.S.C.

§ 2210 under the auspices of 28 U.S.C. § 19838, § 2210

itself creates an implied right of action that permits

MCA privately to assert its rights in the federal

courts.

In Cort v. Ash, 422 U.S: 66 (1975), this Court stated

that four factors must exist before a private right of

action may be implied under a federal statute:

First, is the plaintiff ‘one of the class for

whose especial benefit the statute was en-

acted,” ... that is, does the statute create

a federal right in favor of the plaintiff? Sec-

ond, is there any indication of legislative in-

tent, explicit or implicit, either to create such

a remedy or to deny one? ... Third, is it

consistent with the underlying purposes of

the legislative scheme to imply such a remedy

for the plaintiff? ... And finally, is the cause

of action one traditionally relegated to state

law, in an area basically the concern of the

States, so that it would be inappropriate to

infer a cause of action based solely on federal

law?

422 U.S. at 78 (citations omitted).

As we have seen in the analysis of MCA’s rights

under § 1983 supra, § 2210(a) meets all four of these

enunciated factors.

First, it is evident from the legislative history of

the Airport and Airway Improvement Act that air

carriers and fixed-base operators are the class “for

whose especial benefit the statute was enacted”. As

noted, the legislative history of the 1976 revisions to

the predecessor to § 2210 made it clear that the

amendments were intended to recognize ‘‘the legiti-

mate interests of air carriers and fixed-based opera-

tors in development at airports.” Further, airport

operators are prohibited from charging “discrimina-

tory rates, fees, rentals, and other charges to airport

businesses which make the same or similar uses of

such airport utilizing the same or similar facilities.”

H.R. Rep. No. 94-594, 94th Cong. 2d Sess., reprinted

in 1976 U.S. Code Cong. & Ad. News 1600, 1614.

See discussion in New York Airlines, 628 F. Supp.

at 1447.

The text of the statute itself also makes clear that

air carriers and fixed-based operators are within the

class that the statute was intended to protect. Section

2210(aX2) states that “there will be no exclusive

right” for the use of airport facilities. Section

2210(aX1) provides that each air carrier “shall be sub-

ject to ... nondiscriminatory and substantially com-

parable’’ terms and conditions. There is no indication,

as there is in other aviation acts, that these provisions

were enacted solely for the benefit of the general

public. Compare 49 U.S.C. §§ 1305 and 1349; New

York Airlines, 623 F. Supp. at 1448-1450. To the

contrary, § 2210 specifically addresses issues that are

of concern only to air carriers such as the prohibition

of discriminatory treatment and a prohibition of the

exclusive use of air facilities. Thus, § 2210 meets the

first of the Cort criteria.

Second, the Court must inquire as to whether there

is “any indication of legislative intent, explicit or im-

plicit, either to create such a remedy or to deny one?”

Cort, 422 U.S. at 78. As noted, the Airport and Air-

way Improvement Act has no independent enforce-

ment mechanism. In other words, the Federal

Aviation Administration is not empowered pursuant

to that act to enforce the provisions of the statute.

It is anomalous to suggest that the Congress would

enact a legislative scheme specifically aimed at pre-

venting discrimination against air carriers and pro-

hibiting the exclusive use of air facilities if there was

to be no enforcement mechanism. There is no expres-

sion of Congressional intent to deny such a remedy.

Under the circumstances, it seems clear that there

was a Congressional intention that an air carrier be

permitted to enforce its rights privately since the

Federal Aviation Administration is not granted the

right to do so in its behalf.

The third Cort factor to be considered is whether

an implied right of action is consistent with the un-

derlying purpose of the legislative scheme. This factor

is closely related to the second. Here the predominant

purpose of the legislative scheme is to prevent ex-

clusive use of air facilities in order to insure that the

critical component of a deregulated system—compe-

tition—can flourish. Absent any other enforcement

mechanism, there must be a method by which private

parties can seek relief from discriminatory treatment.

Any other result would be inconsistent with the sta-

tutory scheme.

Finally, the Court is to determine whether the cause

of action is one traditionally relegated to state law

so that it would be inappropriate to infer a cause of

action based solely on federal law. Of all the factors,

this is the most easily decided in MCA’s favor. The

use of air facilities has long been regulated by the

United States. The Federal Aviation Act was first

adopted in 1958. Prior to the passage of the Airline

Deregulation Act of 1978, all aspects of travel by air

were regulated by the federal government. The in-

tense federal interest in this area continues today,

and did in 1982 when the Airport and Airway Im-

provement Act (of which 49 U.S.C. § 2210 is a part)

was enacted.® This is traditionally an area of federal

regulation and it is appropriate for an air cvarrier’s

rights to be protected by federal legislation—and by

the federal courts.

III. The Town's Activities Are Not Protected From In-

junction Under 'The State Action Doctrine

In Count I MCA sought, among other things, in-

junctive relief under 15 U.S.C. § 26 to prohibit the

Town from conspiring with the other air carrier, East

°In 1984, Congress removed any question of the prohibition

contained in 49 USC 4 1305(a) by an amendment deleting from

subparagraph 21 thereof the word “interstate” preceding the

final two words “air transportation.” The effect of the amend-

ment was to extend the prohibition against state action to all

air carriers whether authorized for interstate or intrastate air

transportation.

Hampton Aire, Inc. (EHA), to both restrain trade and

create a monopoly at the East Hampton Airport, ac-

tivities which are prohibited by 15 U.S.C. §§1 and

2. It was specifically alleged that the Town board and

EHA conspired to prevent MCA from obtaining year-

round use of the air facilities. These actions were

directly related in an illegal restraint of trade and

have created a monopoly for the benefit of EHA.

The Second Circuit reasoned that a suit for in-

junctive relief could not be maintained because of the

“state action doctrine,’’ most recently enunciated by

this Court in Town of Hallie v. City of Eau Claire,

__ U.S. __, 105 S. Ct. 1713 (1985). See also Com-

munity Communications Co. v. City of Boulder, 455

U.S. 40 (1982); City of Lafayette v. Louisiana Power

and Light Co., 485 U.S. 389 (1978); Parker v. Brown,

317 U.S. 341 (1943).

The Hallie doctrine exempts municipalities from an-

titrust violations if they establish ‘‘that their anticom-

petitive activities were authorized by the State

‘pursuant to state policy to displace competition with

regulation or monopoly public service.’”’ Hallie, 105

S. Ct. at 1716 (quoting City of Lafayette, 435 U.S.

at 413). As the Second Circuit noted, a municipality

is entitled to protection by the exemption where it

“demonstrate[s] that it is engaging in the challenged

activity pursuant to a clearly expressed state policy.”

Hallie, 105 S. Ct. at 1717.

The Second Circuit relied upon N.Y. Gen. Mun.

Law §§ 350-357. (McKinney 1974 & Supp. 1984-85),

as providing the necessary clear articulation of State

policy to displace competition with monopoly public

service as required by Hallie.

That statute, provides in part, that a Town Board

operating a local airport may:

5. Lease, or sub-lease the real property or

lease, contract or otherwise agree, on an ex-

clusive or nonexclusive basis, for the entire

operation for such airport or landing field,

or of any part thereof, or for the rendering

of various services or conduct of business ac-

tivities, on or at said airport or landing

field... .

The defect in this reasoning is, however, that the

New York Law is itself illegal because it runs afoul

of the Supremacy Clause of the Constitution of the

United States, U.S. CONST., art. VI, cl. 2, which

invalidates state laws that “interfere with or are con-

trary to” federal law. See Gibbons v. Ogden, 22 U.S.

(9 Wheat.) 1, 6 L. Ed. 23 (1824).* With regard to the

Federal Aviation laws, it has been constantly reem-

phasized that the Federal legislation is supreme and

preemptive when it conflicts with municipal authorities

attempting to exercise proprietary and non-proprie-

tary restrictions over aircraft. This has been true in

airport noise cases, City of Burbank v. Lockheed Air

Terminal, Inc., 411 U.S. 624 (1973); San Diego Un-

ified Port District v. Gianturco, 651 F.2d 1306 (9th

Cir. 1981), cert. denied, 455 U.S. 1000 (1982); British

Airways Board v. Port Authority of New York, 564

F.2d 1002 (2d Cir. 1977); United States v. County of

Westchester, 571 F. Supp. 786 (S.D.N.Y. 1983); United

* Moreover, the New York law was originally adopted in 1945

(as a replacement for a 1928 statute) long before the passage

of the applicable Federal Aviation laws.

States v. State of New York, 552 F. Supp. 255

(N.D.N.Y. 1982), aff'd, 708 F.2d 92 (2d Cir. 1983),

cert. denied, 466 U.S. 936 (1984), in exclusive FBO

lease cases, City of Pompano Beach v. F.A.A., 774

F.2d 1529 (11th Cir. 1985), and in exclusive access

cases, City of Dallas v. Southwest Airlines Co., 371

F. Supp. 1015 (N.D. Tx. 1973) aff'd, 494 F.2d 773

(5th Cir. 1974), cert. denied, 419 U.S. 1079 (1974),

rehearing denied, 420 U.S. 913 (1975), most recently

in the access case involving New York Airlines. New

York Airlines, Inc. v. Duke County, 623 F. Supp. 1435

(D.C. Mass. 1985). Only the decision of the Second

Circuit in this case suggests that federal law must

take a back seat to state and local regulations.

The New York Law dir ctly conflicts with the pro-

hibitions of the exclusive use of an air facility by. an

air carrier contained in the Federal Aviation Act, 49

U.S.C. §1305(a). That act provides:

Preemption. (1) Except as provided in par-

agraph (2) of this subsection, no State or

political subdivision therevf and no interstate

agency or other political agency of two or

more States shall enact or enforce any law,

rule, regulation, standard, or other provision

having the force and effect of law relating

to rates, routes, or services of any air carrier

having authority under Title IV of this Act

to provide air transportation.

49 U.S.C. § 1305(a).

Section 352 of the New York Municipal Laws

quoted above directly violates the prohibitions of

§1305(a) which by its very title “‘preempts’’ this field

of the law and prohibits states from regulating rates,

routes or services of an air carrier. It cannot, and

has not, been argued that the actions of the Town

here were anything other than an attempt to regulate

MCA’s rates, routes and services. Thus, the invalid

New York law can provide no immunity to the Town

to protect it from injunctive relief.’

The Second Circuit posited that § 1305(a) does not

preempt the activity at issue here because § 1305(b\1)

provides that subsection (a) is not to be construed to

limit the authority of “any ... political subdivision

as the owner or operator of an airport served by any

air carrier certificated by the Board to exercise its

proprietary powers and rights.” 49 U.S.C. § 1305(b).

It apparently was the view of the Second Circuit that

this subsection overrides § 1305(a) and that because

the Town was exercising its proprietary rights in leas-

ing property there was no conflict between the federal

and state statutes.

The effect of the ruling of the Second Circuit is to

totally reverse the intention of the Airline Deregu-

lation Act. The primary purpose of that Act was to

allow the marketplace to make judgments as to which

and how many carriers should operate in any given

air facility. Section 1305(a) was intended to preempt

local regulations of routes, rates and services. The

Town’s actions more than regulate MCA’s routes,

rates and services—they effectively prevent MCA

from existing at East Hampton.

7 Even during this litigation, the Town has required that MCA

furnish its proposed rates, routes, and services as a precondition

to the Town’s granting MCA permission to provide year round

service. See Appendix I.

Nowhere in the record did the Town attempt to

justify its decision on any basis whatsoever, such as,

for example, that there is not enough space at the

terminal, that MCA’s operations would increase noise,

or that MCA was an unsafe carrier.

Rather, the Town is attempting to exercise pre-

cisely the economic judgment which the Civil Aero-

nautics Board formerly wielded—the Town has chosen

EHA over MCA. That choice is not merely to favor

EHA, but to totally destroy MCA and make EHA

the sole beneficiary of all of MCA’s business. Such a

decision is not, and cannot, be shielded from antitrust

scrutiny. The decision of the Second Circuit, if it is

not reversed, will immunize the actions of airport pro-

prietors in excluding competition under the rationale

that it is simply a matter of contract within the pro-

prietary rights of an airport operator. Clearly that

was not the intention of Congress.

As stated, sound precedent demonstrates that there

is a limitation to the definition of “‘proprietary pow-

ers.’’® Surely Congress did not intend by adopting

subsection (b) to render subsection (a) a dead letter.

To reach that conclusion this Court must not only

ignore all standards of statutory construction, but

must also impliedly overrule nearly three decades of

sound authority, and finally, discard or at least dis-

mantle the supremacy clause.

In sum, the Town’s activities violate 15 U.S.C. §§ 1

and 2. The Second Circuit in effect so found.’ The

Town is not protected from injunctive relief by op-

® British Airways Board v. Port Authority of New York, 564

F.2d 1002 (2d Cir. 1977); United States v. County of Westchester,

eration of the state action doctrine because the New

York Municipal Law relied upon is invalid under the

Supremacy Clause of the Constitution of the United

States in that it attempts to permit regulation in an

area preempted by federal law, namely, 49 U.S.C.

§ 1305(a).

CONCLUSION

For these reasons, Petitioner respectfully requests

this Court to issue a Writ of Certiorari to the United

States Court of Appeals for the Second Circuit in

order that the decision of that court be reversed.

571 F. Supp. 786 (S.D.N.Y. 1983); United States v. State of New

York, 552 F. Supp. 255 (N.D.N.Y. 1982), aff'd, 708 F.2d 92 (2d

Cir. 1983), cert. denied, 466 U.S. 936 (1984); San Diego Unified

Port District v. Superior Court, 136 Cal. Rptr. 551 (Cal. Dist.

Ct. App.), cert. denied sub nom., Britt v. San Diego Unified Port

District, 484 U.S. 859 (1977); But see Arrow Air, Inc. v. Port

Authority of New York, 602 F. Supp. 314 (S.D.N.Y. 1985); Global

International Airways Corp. v. Port Authority of New York, 727

F.2d 246 (2d Cir.), reh’g denied, 731 F.2d 127 (2d Cir. 1984);

Santa Monica Airport Ass’n v. City of Santa Monica, 659 F.2d

100 (9th Cir. 1981); National Aviation v. City of Hayward, 418

F. Supp. 417 (N.D. Cal. 1976).

9 “We therefore must assume that the New York legislature

contemplated the kind of anticompetitive activity in which the

Town of East Hampton has engaged.” 784 F.2d at 96.

Respectfully submitted,

R. TERRENCE NEY

THOMAS F. FARRELL, II

BOOTHE, PRICHARD & DUDLEY

8280 Greensboro Drive

McLean, Virginia 22102

(703) 356-2200

Counsel of Record

Counsel for Petitioner

MONTAUK-CARRIBEAN

AIRWAYS, INC.

Of Counsel:

I. LEONARD FEIGENBAUM ,

425 Broad Hollow Road

Melville, New York 11747

(516) 752-8500

Date: June 25, 1986

APPENDIX

sh ae ete itaae BRIA At CSTR OBA To

APPENDIX A

Docket No.

UNITED STATES District Court

EASTERN DISTRICT OF NEW YORK

MONTAUK-CARRIBEAN AIRWAYS, INC., d/b/a

LONG ISLAND AIRLINES,

Plaintiff,

-against-

JuDITH HOPE, RANDALL PARSONS, ANTHONY BULLOCK,

MICHAEL J. FINAZzO, and HucH KING, Individually and as

the Town Board of the Town of East Hampton, CHARLES

T. SmiTrH, RUSSELL STEIN, East HAMPTON AIRE, INC., and

FRANK LA VIGNA,

Defendants.

COMPLAINT

JURISDICTION

1. The jurisdiction of this Court is based upon the Sher-

man and Clayton Acts, 15 USC §§1, 2, 15 and 26; Federal

Aviation Act, 49 USC §§1305 and 1349a; Civil Rights Law,

42 USC §1983; and the principles of pendent jurisdiction.

2. The venue of this action is properly before the United

States District Court for the Eastern District of New York

since all of the parties hereto reside within such district.

BACKGROUND

3. At all times hereinafter mentioned, MONTAUK-CAR-

RIBEAN AIRWAYS, INC. (MCA) was and still is a New

York corporation operating its business as an air carrier

within the meaning of §1305 of the Federal Aviation Act

involved in interstate commerce and as a fixed base op-

erator (FBO) within the meaning of § 1349a of the Federal

Aviation Act at East Hampton Airport, East Hampton,

Suffolk County, New York (the Airport), and, since April

1984, doing business under the name LONG ISLAND AIR-

LINES.

4. Upon information and belief, the defendants PAR-

SONS, FINAZZO, BULLOCK and KING are residents of

the Town of East Hampton and, since at least January

1983, have been and still are duly elected councilmen of

the Town of East Hampton. Upon information and belief,

defendant HOPE is a resident of the Town of East Hamp-

ton and, since January 1984, has been and continues to

be the duly elected supervisor of the Town of East Hamp-

ton who, together with the aforementioned councilmen,

constitute the town board which is the governing body of

the Town of East Hampton.

5. Upon information and belief, RUSSELL STEIN is a

resident of the Town of East Hampton and has been, since

January 1984, the Town Attorney of the Town of East

Hampton.

6. The Town of East Hampton (the Town) is a municipal

corporation located within the County of Suffolk and State

of New York and is, and at all times mentioned herein

has been, the owner and operator of the Airport.

7. Upon information and belief, CHARLES T. SMITH

is a resident of the Town and is, and at all times men-

tioned herein has been, employed by the Town as the

manager of the Airport.

8. Upon information and belief, EAST HAMPTON

AIRE, INC. (EHA) is a domestic corporation maintaining

its place of business as an FBO at the Airport.

9. Upon information and belief, FRANK LA VIGNA is

a resident of the Town, and at all times hereinafter men-

tioned is and has been the chief executive officer of EHA.

10. Pursuant to the Airport and Airway Improvement

Act of 1982 (49 USC §2201 et seq, and specifically 49

USC §2204a, Airport Development and Airport Planning

(ADAP)) the Town entered into a Grant Agreement (the

Grant Agreement) with the Federal Aviation Administra-

tion (FAA), which Agreement is identified as Grant Agree-

ment Project No. 3-36-0024-01-83, Contract No. FA

EA2445, which was executed on 29 September 1983.

11. Pursuant to 49 USC §2210 and the Grant Agree-

ment, the Town agreed not to discriminate against any

air carrier using the Airport or any fixed base operator

located at the Airport and further agreed to grant no

exclusive right to any person providing aeronautical ser-

vices to the public.

12. Pursuant to the Grant Agreement, the Town has

received ADAP funding for development and improvement

of the Airport.

13. On or about 12 June 1978, the Town entered into

a Lease Agreement with EHA (the EHA Lease) under

which EHA commenced operations as an FBO at the Air-

port.

14. Plaintiff had been operating as an FBO and air

carrier at the Airport on a year-round basis for over 15

years prior to the execution of the current lease dated 28

December 1979 between plaintiff and the Town (the MCA

lease). That lease was denominated ‘Seasonal Fixed Base

Operator’s Agreement East Hampton Airport Lease”’, cov-

ered a term from 1 January 1980 through 31 December

1989, directed that certain services must be provided by

plaintiff during the period from 1 May through 30 Sep-

tember of each year (the season) and that plaintiff must

be prepared to provide all FBO services at any time, but

contained no provision specifically prohibiting any of

plaintiff's operations during the period from 1 October

through 30 April (the off-season).

16. In 1983, plaintiff planned to continue its air carrier

and FBO operations after 30 September but was specifi-

cally prohibited from doing so by the Town Board as ex-

pressed in a letter from defendant PARSONS dated 28

September 1983.

17. On 18 November 1983, a hearing was held by the

Town Board as to whether plaintiff should be allowed to

be a year-round operator at the Airport. At that hearing,

the Board took testimony from representatives. of both

plaintiff and EHA.

18. In December 1983, plaintiff submitted to the Town

Board a lease amendment executed by plaintiff providing

for the immediate elimination of any seasonal restriction

on plaintiff's operations, which lease amendment was re-

jected by the Town Board.

19. Pursuant to the provisions of Rider #2 to the MCA

lease, the rent and fees to be paid pursuant to such lease

for the second five years thereof were to be renegotiated

during 1984. Upon the Town Board’s insistence, an entire

proposed lease was prepared by the plaintiff and submitted

to the Town Board on 25 September 1984. No response

in writing has ever been made to such proposed lease.

20. On 1 October 1984, plaintiff attempted to continue

its air carrier and FBO operations at the Airport.

21. By letter dated 1 October 1984, STEIN, as Town

Attorney, acting ostensibly upon the unanimous direction

of the Town Board, notified plaintiff in writing of violation

of plaintiff's lease by virtue of the continuance of its op-

erations.

22. Thereafter, by letter dated 22 October 1984, STEIN,

as Town Attorney, and ostensibly on the express direction

of the Town Board, notified plaintiff of the conditional

termination of its lease should it fail, amongst other things,

to discontinue all operations at the Airport until 1 May

1985.

23. In order to avoid the termination of its lease, plaintiff

discontinued all air carrier operations and all FBO oper-

ations at the Airport at the end of October 1984.

24. Plaintiff complained to the FAA as to its treatment

by the Town Board, as a result of which the FAA com-

menced an investigation of the allegation of discrimination

at the Airport by reason of the refusal of the Town to

allow plaintiff to operate year-round.

25. By letter dated 7 January 1985 to STEIN, THOMAS

C. HALLORAN, regional counsel for the FAA notified the

Town of the FAA’s conclusion that plaintiff is not being

treated on fair and reasonable terms and without unjust

discrimination in violation of 49 USC §1349 and Assurance

20 of the Town’s Grant Agreements with the FAA.

26. On 7 December 1984, the Town Board adopted a

resolution directing that a public hearing be held on 18

January 1985 concerning the following questions:

“1. Whether it is reasonable, prudent and in the

best interests of the people of the Town of East

Ham, ‘on to authorize year-round operation at the

Town Airport by more than one (1) fixed-base

operator (“FBO”’).

2. If the answer to question No. 1 is negative

and the Town should continue to limit year-round

fixed base operations to a single company,

whether any such limitation can and will comply

with all applicable FAA regulations, including

those which appear to permit such a limitation

only where:

...it would be unreasonably costly, burdensome

or impractical for more than one fixed base op-

erator to provide [FBO] services, and if allowing

more than one fixed-based operator to provide

such services would require the reduction of space

leased pursuant to an existing agreement be-

tween such single fixed-base operator and such

airport.”

27. On 18 January 1985, a public hearing was held be-

fore the Town Board, at which time the Board took tes-

timony from representatives of both plaintiff and EHA.

No decision thereafter was rendered by the Town Board.

COUNT I

28. During 1983, 1984 and to the present, the defendants

have conspired to restrain trade and to create a monopoly

for the benefit of defendant EHA, which has caused a

substantial lessening of competition and a substantial im-

pact on interstate commerce resulting from loss of sales

and profits by plaintiff. Plaintiff has been substantially

damaged thereby in its business and property within the

meaning of the Anti-Trust Laws of the United States.

29. The prohibition of plaintiffs air carrier operations

at the Airport during 1983, and 1984 and to the present

by the defendants HOPE, PARSONS, BULLOCK, FIN-

AZZO and KING as the Town Board of the Town and

STEIN as the Town Attorney, was in violation of the

federal pre-emption as to rates, routes or services of any

air carrier as provided in 49 USC §1305 and such action

was taken willfully, deliberately, with full knowledge of its

violation of federal law and with the intent of granting

to EHA a monopoly to the detriment of plaintiff.

30. The effect of the defendants’ actions has been to

eliminate air carrier competition at the Airport, to reduce

the plaintiff's off-season share of the air carrier business

to zero and to reduce plaintiff's year-round market share

from 44% in 1980 to 11% in 1984.

31. The actions of the defendants HOPE, PARSONS,

BULLOCK, FINAZZO, KING and STEIN in prohibiting

off-season air carrier operations of plaintiff during 1983,

1984 and to the present were beyond the statutory au-

thority of those individuals as officials of the Town, and

therefore such individuals are personally liable for the dam-

ages resulting from their actions.

32. The actions of the defendants HOPE, PARSONS,

BULLOCK, FINNAZO and KING, acting as the Town

Board of the Town and STEIN as Town Attorney, in

prohibiting FBO operations by the plaintiff from January

1984 to the present were in violation of 49 USC §1349a

and such actions were taken willfully, deliberately and with

full knowledge of the law and with the intention of grant-

ing to EHA a monopoly to the detriment of plaintiff.

33. The Town Board empowered SMITH, as Airport

Manager, to designate and distribute to plaintiff and EHA,

tie-down and aircraft parking spaces for which the FBO’s

charge daily fees, and which parking and tie-down spaces

also generate fuel sales to the aircraft operators.

34. SMITH, acting with the approval of the Town Board

and over the objections of plaintiff, during 1983 and 1984

distributed approximately 90% of the tie-down and parking

spaces to EHA and the remaining 10% to the plaintiff

during the season, and all of the tie-down and all but two

of the parking spaces to EHA during the off-season.

35. Commencing in 1983, the defendants PARSONS,

BULLOCK, FINAZZO, KING and SMITH, joined by

defendant HOPE in 1984, acted in combination and con-

spiracy with defendants LA VIGNA and EHA to direct

transient business at the Airport to the parking and ser-

vice facilities of EHA in order to enhance the business of

EHA to the detriment of the plaintiff.

36. The actions of the defendants with reference to FBO

operations at the Airport have been to create a monopoly

for the benefit of the defendant EHA during the off-sea-

son, a substantial monopoly for the defendant EHA during

the season, and the continuing diversion of business away

from the plaintiff to its detriment.

37. During 1983, 1984 and to the present, the defendants

have acted to create and enforce a monopoly for the ben-

efit of defendant EHA at the Airport during the off-season

and to reduce plaintiff's competitive position during the

season to the extent of creating a substantial monopoly

for defendant EHA during the entire year in violation of

15 USC §§1 and 2 and have thereby damaged plaintiff.

COUNT II

38. 15 USC §1305 provides for federal pre-emption and

prohibits any state or political subdivision thereof from

regulating rates, routes or services of any air carrier,

thereby prohibiting the Town from denying equal access

by the plaintiff to the Airport.

39. 49 USC §1349a prohibits unjust discrimination

against an FBO or the grant of an exclusive right to an

FBO.

40. The intention and effect of the Federal Aviation Act

was to minimize governmental interferences with free com-

petition amongst FBOs at federally funded airports for the

benefit of the public and FBOs situated similarly to the

plaintiff.

41. As an air carrier and FBO operating at a federally

funded airport, plaintiff is part of a group intended to be

benefited by the Federal Law and entitled to redress for

violation of its rights by the defendants.

42. In prohibiting plaintiff from operating during the

off-season, the defendants violated the assurances required

by 49 USC §2210a and the Sponsor’s Assurances contained

in the Grant Agreement in failing to provide equal access

to plaintiff to the use of the Airport and in unfairly dis-

criminating against plaintiff by charging to plaintiff the

same annual rent as to EHA but only for five months use.

43. The Town Board through SMITH as airport man-

ager, imposed upon plaintiff a passenger head tax during

1983 and 1984 in deliberate and knowing violation of fed-

eral pre-emption under 49 USC §1305 and compelled pay-

ment from plaintiff in the amount of $2,200.00.

44. As a result of the actions of the defendants in vi-

olation of the provisions of the Federal Aviation Act,

plaintiff has been rendered uncompetitive and has suffered

great losses in saler and profits.

COUNT III

45. The actions of the defendants HOPE, PARSONS,

BULLOCK, FINAZZO and KING as the Town Board,

STEIN as the Town Attorney, and SMITH as the Airport

Manager, in prohibiting plaintiff's air carrier operations

during the off-season of 1983, 1984 and to the present

and prohibiting plaintiff's other off-season FBO operations

in 1983, 1984 and to the present, violate the terms of the

MCA lease which contains no such prohibitions and

plaintiff's right to quiet enjoyment of the leased premises.

46. As a result of the aforementioned violations of

plaintiff's lease, plaintiff has suffered substantial damage

in the form of loss of business and profit, to which it is

entitled to recompense.

10a

COUNT IV

47. Commencing in 1983, the defendants PARSONS,

BULLOCK, FINAZZO and KING, joined by the defendants

HOPE and STEIN in January 1984, combined and con-

spired with defendants EHA and LA VIGNA to illegally

create for defendant EHA a monopoly in air carrier and

FBO services at the Airport, and to deliberately and ma-

liciously destroy the business of plaintiff at the Airport.

48. In furtherance of the above mentioned conspiracy,

the Board Members, commencing in 1983 and continuing

to date, have forwarded to defendant LA VIGNA copies

of correspondence from plaintiff and its attorneys, over

objections by plaintiff and its attorneys, while failing to

answer correspondence from plaintiff and its attorneys.

49. The Town Board, through SMITH as airport man-

ager, in combination with EHA and LA VIGNA, imposed

upon plaintiff landing fees which were not required of

EHA and defendant SMITH utilized the Airport radio

equipment to advertise EHA’s fuel sales and services to

transient aircraft, resulting in the diversion of a great deal

of business from plaintiff to defendant EHA, reassigned

plaintiff's tie-down and landing spaces to defendant re-

sulting in loss to plaintiff of the income generated by such

tie-down and parking spaces and directed plaintiff to pay

to defendant EHA parking and tie-down fees for plaintiff’s

own aircraft, and authorized the replacement of plaintiff's

sign next to the terminal building by a sign from defendant

EHA.

50. The defendants harrassed plaintiff by causing crim-

inal charges for environmental pollution to be brought

against MICHAEL S. PERAC NE, plaintiff’s president, in

July of 1984 with knowledge to the involvement of Mr.

PERAGINE with plaintiff and on property not leased to

plaintiff.

51. Despite repeated requests from plaintiff from May

through September 1984, defendant SMITH refused to

lla

supply information demanded, in violation of the Freedom

of Information law (New York Public Officer’s Law §§84

et. seq.) and further denied the existence of and refused ©

to provide a survey, map or sketch of the Airport which

had consistently been in his possession, until 28 September

1984, which document was required in order to try to

delineate parking and tie-down spaces.

52. With respect to air carrier operations, the defendants

PARSONS, BULLOCK, FINAZZO and KING, acting in

concert with and at the behest of defendants EHA and

LA VIGNA prohibited plaintiff's air carrier operations dur-

ing the off-season from 1 October 1983 through 31 De-

cember 1983, and thereafter from 1 January 1984 through

30 April 1984, in conjunction with the defendants HOPE

and STEIN. Such prohibition was illegal, violative of 49

USC §1305, beyond the authority of the Town Board,

known by the defendants to be illegal, and done maliciously

and with the intent of destroying plaintiff's business.

53. As a result of defendants’ actions, plaintiff’s business

has been greatly damaged and plaintiff has suffered a

substantial loss of sales and profits.

COUNT V

54. The abovementioned actions of the defendants

HOPE, PARSONS, BULLOCK, FINAZZO, aud KING, act-

ing as the Town Board of the Town, STEIN, acting as

the Town Attorney of the Town, and SMITH, acting as

the airport manager for the Town, were taken under color

of the Town Law of the State of New York and ordinances

of the Town of East Hampton and caused the deprivation

of plaintiffs rights to operate as an air carrier and FBO

under the provisions of the Federal Aviation Act, resulting

in damage to plaintiff, all in violation of 42 USC §1983.

Wherefore, plaintiff requests judgment against the

defendants as follows:

12a

A. On the first count, that the defendants be adjudged

to have violated the antitrust laws of the United States,

that the actual damages to plaintiff's business and property

resulting from such violations be determined and that

plaintiff have judgment against the defendants for three

times the amount of the actual damages so determined,

together with its costs and a reasonabie attorney’s fee as

provided by law;

B. On the second count, that the defendants HOPE,

PARSONS, BULLOCK, FINAZZO and KING, individually

and as constituting the Town Board of the Town of East

Hampton; STEIN, individually and as the Town Attorney

of the Town of East Hampton; and SMITH, individually

and as the airport manager of the Town of East Hampton,

be adjudged to have violated the Federal Aviation Act,

and that plaintiff have judgment for the amount of the

damages determined to have resulted from such violations;

C. On the third count, that the Town of East Hampton

be adjudged to have violated its lease with the plaintiff

and that plaintiff have judgment against the Town of East

Hampton for the amount of damages determined to have

resulted from such violation;

D. On the fourth count, that defendants be adjudged to

have conspired against plaintiff, that the actual damages

to plaintiffs business’ and property be determined, and that

plaintiff have judgment against the defendants for three

times the amount of such damages and for $10,000,000.00

as punitive damages for such conspiracy;

E. On the fifth count, that defendants HOPE, PAR-

SONS, BULLOCK, FINAZZO, KING, STEIN and SMITH,

individually and as officials of the Town of East Hampton

be adjudged to have deprived plaintiff of its rights, priv-

ileges and immunities under the Constitution and Laws of

the United States, and that plaintiff have judgment for

the damages to plaintiff's business and property and for

legal fees pursuant to 42 USC §1988.

13a

F. A declaration that plaintiff's lease entitles plaintiff

to operate as an air carrier and fixed base operator year-

round.

F. A permanent injunction against the defendants pro-

hibiting them from interfering with the year-round oper-

ation of plaintiff as an air carrier and fixed base operator.

Dated: Melville, New York

8 February 1985

/s/ I. LEONARD FEIGENBAUM

I. LEONARD FEIGENBAUM

Attorney for Plaintiff

425 Broadhollow Road

Melville, New York 11747

(516) 752-8500

l4a

APPENDIX B

85-CV-420

UNITED StTaTES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

MONTAUK-CARIBBEAN AIRWAYS, INC., d/b/a

LONG ISLAND AIRLINES,

Plainttff,

-against-

JUDITH NoPE, RANDALL PARSONS, ANTHONY BULLOCK,

MICHAEL J. Finazzo, and HucH KInG, Individually

and as the Town Board of the Town of East Hampton,

CHARLES T. SMITH, , RUSSELL STEIN, EAST HAMPTON AIRE,

Inc., and FRANK La VIGNA

Defendants.

DECISION

AND ORDER

BRAMWELL, D. J.

Plaintiff Montauk Caribbean Airways, Inc. d/b/a Long

Island Airlines (MCA) commenced this action against mem-

bers of the Town Board of the town of East Hampton,

New York and others. The action is based on the Sherman

and Clayton antitrust acts, the Federal Aviation Act, and

federal civil rights law. Defendants Hope, Parsons, Bul-

lock, Finazzo, King, Smith and Stein (the Town defendants)

collectively move to dismiss the complaint for failure to

state a claim. The plaintiff cross-moves for a preliminary

15a

injunction, for an order dismissing defendants East Hamp-

ton Aire’s (EHA) and LaVigna’s counterclaims, and for an

order transferring the matter to the federal courthouse in

Uniondale, New York. The plaintiff also opposes the Town

defendant’s motion. Defendants EPA and LaVigna oppose

the plaintiff's motion to dismiss their counterclaims.

This action relates to a lease permitting plaintiff MCA

to conduct business as a fixed-base operator (FBO) at an

airport (the Airport) owned and operated by the Town of

East Hampton, New York (the Town). The plaintiff is a

New York corporation doing business as an air carrier at

the Airport. Defendants Parsons, Finazzo, Bullock and

King are councilmen of the Town and sit on the Town

Board. Defendant Hope is the supervisor of the Town

Board. Defendant Russell Stein is the Town’s attorney

while the Town employs defendant Charles Smith as man-

ager of the Airport. Defendant Frank LaVigna is chief

executive officer of defendant East Hampten Aire (EHA)

which operaters as an FBO on a year-round basis at the

Airport.

On or about December 28, 1979, the plaintiff and the

Town entered into a ten-year lease denominated as a ‘‘Sea-

sonal Fixed Base Operator’s Agreement East Hampton

Airport Lease.” The effective span of the lease is from

January 1, 1980 to December 31, 1989, and the lease au-

thorizes MCA’s FBO activities for only 5 months a year

from May 1 to September 30 of each year. In 1983 and

1984, the plaintiff sought to operate beyond the annual

September 30 cutoff date for FBO activity under the lease.

However, the Town Board informed the plaintiff on each

occasion that such activity was not authorized under the

lease agreement. On each occasion, the plaintiff ceased

operations.

In the fall of 1984, the plaintiff filed a complaint with

the Federal Aviation Administration (FAA) charging the

Town Board with unjust discrimination pursuant to 49

léa

U.S.C. § 1849, and under the terms of a Grant Agreement

between the FAA and the Town. The objective behind the

complaint was to compel the Town to grant the plaintiff

a full-year lease. On January 7, 1985, after an investiga-

tion, the FAA found that the Town’s failure to grant the

plaintiff a full-year lease was in fact discriminatory. The

FAA also allotted the Town 30 days to rectify the situ-

ation.

On January 18, 1985, the Town Board held hearings on

the question of extending the plaintiff's lease in accordance

with the FAA’s directive. The Board never issued an opin-

ion or conclusion thereafter.

The instant action was commenced on February 8, 1985

seeking damages for the Town’s leasing policy.

The Town defendants move, pursuant to Rule 12(b\6)

of the Federal Rules of Civil Procedure, for an order dis-

missing the complaint for failure to state a claim. The

Town defendants argue that the plaintiff's claims under

the Sherman Act, the Clayton Act, 42 U.S.C. § 1983, and

the Federal Aviation Act are defective. The plaintiff op-

poses the motion and moves for a preliminary injunction.

The plaintiff also moves to dismiss defendants EHA’s and

LaVigna’s first and second counterclaims for defamation.

These defendants oppose the plaintiff's motion. For rea-

sons that follow, the Town defendants’ motion is denied

in part and granted in part. The plaintiff’s motion is denied

in toto.

The Court first turns to the Town defendants’ motion

to dismiss the complaint to the extent that it is based on

the Sherman and Clayton Acts. The Town defendants ar-

gue that these acts are of no consequence in this case

given the weight of the Local Government Antitrust Act

of 1984 and the state action antitrust doctrine. The Court

only partially agrees with the Town defendants’ position.

The Local Government Antitrust Act of 1974, 15 U.S.C.

§§ 34, 35, and 36, provides that:

17a

[njo damages, interest on damages costs, or costs,

or attorney’s fees may be recovered under [the

Clayton Act] from any local government, or of-

ficial or employee thereof acting in an official

capacity. 15 U.S.C. § 35(a). AND

the term ‘local government’ means ... a city,

county, parish, town, township, village, or any

other general function governmental unit estab-

lished by State law. 15 U.S.C. § 34.

The prohibition on antitrust actions under these provisions

is sweeping. This is clear from both the plain language of

the Act and its legislative history, which indicate that the

Act was intended to go further than the federal common

law prohibition on such claims.

Here, the Court believes that the Local Government

Antitrust Act bars that part of the complaint based on

the Clayton Act. First, we are concerned in this case with

local government employees and officials as contemplated

under the Act. This is apparent as the Town defendants

were either connected to the Town’s general governmental

functions through the Town board and its Attorney’s Of-

fice, or by virtue of being appointed and employed by the

Town. Second, the Town defendants were acting in their

official capacities-in executing and enforcing the lease in

question, and in overseeing airport operations.

However, the court cannot take the same position on

the plaintiff's Sherman Act claim. First, despite the Town

defendants’ assertions, the broad prohibition of the Local

Government Antitrust Act does not reach Sherman Act

claims. Section 35(a) of Title 15 clearly and exclusively

refers to a prohibition of Clayton Act claims under sections

15, 15a and 15c¢ of Title 15. Also, the legislative history

refers to a straight and narrow purpose of prohibiting

solely Clayton Act suits against localities. In fact, Page 2

of House Report 98-965 on the Act states that the aim

18a

of the legislation is to preclude “suits ... of the Clayton

Act.” Nothing in the House Report indicates otherwise.

Having said that, it becomes obvious that the plaintiffs

Sherman Act claims may be precluded only under the fed-

eral common law state action standard as articulated in

Community Communications Co., Inc. v. City of Boulder.

This U. S. Supreme Court standard is far more strict than

the Local Government Act’s rule. The City of Boulder

standard shuns blanket immunity and only protects local

government officials performing pursuant to a “‘clearly ar-

ticulated and affirmatively expressed” state policy. Such

policy must indicate an intent to delegate authority the

exercise of which may have an anticompetitive effect. Also,

such policy must be actively supervised by the state. Here,

the Court is not satisfied that the second leg of this has

been satisfied. The Court is not persuaded that New York

State authorities actively regulate the Town’s management

of airport affairs. Since the question of regulation is es-

sentially one of fact, the Court will permit discovery to

go forward as to this issue.

Hence, the plaintiff's Clayton Act claims are defective

and are dismissed as to the Town defendants. The Sher-

man Act claims remain open.

The Court now turns to the Town defendants’ argument

that the complaint fails to state a claim under the Federal

Aviation Act. Specifically, the Town defendants contend

that the provisions the plaintiff relies on—sections 1305

and 1349 of the Federal Aviation Act—do not provide

private causes of action, and that they are left for Federal

Aviation Administration to enforce.

The Court agrees. Pursuant to the well-settled principles

of Cort v. Ash, the mere facts that a federal statute has

been violated and a person has been harmed, do not lead

to the conclusion that a private cause of action is available.

In order to determine whether a cause of action is avail-

19a

able under a statute, the courts will, inter alia, turn to

legislative history and statutory language for guidance.

In the present case, we are concerned with section 1305

and 1349. Section 1349%a) has been interpreted as prohib-

iting federally funded airports from discriminating against

fixed-based operations. However, the provision does not

articulate a private cause of action or mention the avail-

ability of court-fashioned remedies. The same is true of

section 1305 which concerns federal preemption of au-

thority to regulate air carriers. Also, the Court is aware

of no policy underlying either section which suggests that

a private right of action ¢aists. More important, however,

is the long line of precedent denying any unarticulated

private rights of action under the Federal Aviation Act.

Judge Curtin of the Western District of New York con-

sidered this issue in Guthrie v. Genessee where he con-

cluded that the Federal Aviation Act did not provide a

private cause of action. Judge Curtin’s sound and thorough

analysis on this point compels the Court to follow suit.

Hence, the plaintiffs Federal Aviation Act claims are dis-

missed as to the Town defendants.

The Town defendants also move to dismiss the fifth

count in the complaint pursuant to Rule 12(b\X6). Count

five is brought pursuant to 42 U.S.C. § 1983 for depri-

vation of rights under the Federal Aviation Act. The Court

believes that this count should be dismissed pursuant to

the U.S. Supreme Court’s decision in Middlesex County

Sewage Authority v. National Sea Clammers. This decision

provides that section 1983 is not available as a remedy

for statutory violations if (1) Congress foreclosed private

enforcement of a statute in the enactment itself, or (2)

the statute at issue is of the type which does not create

enforceable rights. The plaintiff's fifth count refers to

rights it is purportedly entitled to pursuant to the Federal

Aviation Act. However, as the Court has already decided,

there is no private right of enforcement under the FAA.

Hence, it is beyond doubt that the plaintiff falls into the

20a

first. category of cases prohibited under Middlesex. Count

five is dismissed as to the Town defendants.

The Court now turns to the plaintiff's motion for a

preliminary injunction under Rule 65. MCA seeks an in-

junction preventing the Town defendants from interfering

with the plaintiff's support services and operations as an

air carrier at the Airport on a year-round basis. The Court

wil! not issue such relief.

The Second Circuit standard for issuance of a prelimi-

nary injunction is well-settled. The moving party must

demonstrate the probability of immediate irreparable harm

and either (1) a likelihood of success on the merits of its

claim, or (2) sufficiently serious questions going to the

merits making them a fair ground for litigation, and a

balance of hardships tipping decidedly in the movants fa-

vor. In the recent case of Citibaik v. Citytrust, the Second

Circuit also emphasized that the movant must demonstrate

that irreparable harm will result before a decision on the

merits is rendered.

In this case, MCA cannot claim that irreparable harm

will result before a decision on the merits is rendered.

First, based on the FAA letter dated January 7, 1985, the

agency may in fact step in between now and September

30 to issue relief. Second, the plaintiff would not be likely

to suffer irreparable harm before its 1985 lease term ac-

tually expires on September 30, 1985. Between that time

and now, the case could easily be disposed of or settled

depending on the course pre-trial activities take.

The plaintiff also seeks to dismiss defendants EHA’s

and LaVigna’s counterclaims for defamation. The motion

is denied. These defendants have clearly alleged causes of

action for defamation with adequate particularity to satisfy

Rule 12(bX6). Further, inasmuch as the plaintiff has offered

no 3g) statement as required under the Local Rules of

this district and there has been little or no discovery at

2la

this stage, the Court cannot grant the motion for summary

judgment.

Finally, the plaintiff moves to transfer the entire matter

to the United States district Court in Uniondale, New

York. Rule 4(b) of the Calendar Rules for this district

provides:

Long Island Case Designations. Within twenty

(20) days after the original assignment, any party

may serve and file with the chief judge a written

request to review the clerk’s designation of, or

failure to designate, a “Long Island Case.” After

consultation with the judge to whom the case was

assigned, the chief judge shall review and deter-

mine the propriety of the designation. If the des-

ignation is changed then the clerk shall reassign

the case in accordance with the determination of

the chief judge.

Under this rule, any application must be directed to Chief

Judge Weinstein.

Accordingly, the Town defendants’ motions are granted

except that the plaintiff's Sherman act claims may remain

open. The plaintiff's motions are denied in toto.

IT IS

SO ORDERED.

/s/ HENRY BRAMWELL

U. S. D. J.

Dated: Brooklyn, New York

May 28th, 1985

22a

APPENDIX C

85-CV-420

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

MONTAUK-CARIBBEAN AIRWAYS, INC.,

d/b/a LONG ISLAND AIRLINES,

-against-

JUDITH HOPE, RANDALL PARSONS,

ANTHONY BULLOCK, MICHAEL J. FINAZZO,

and HuGuH KING, Individually and as

the Town Board of the Town of East Hampton,

New York, CHARLES T. SmiTrH, RUSSELL STEIN,

East HAMPTON AIRE, INC., and FRANK LA VIGNA,

Defendants.

Plaintiff,

DECISION AND ORDER

BRAMWELL, D. J.

Plaintiff Montauk Caribbean Airways, Inc. d/b/a Long

Island Airlines (MCA) commenced this action against mem-

bers of the Town Board of the Town of East Hampton,

New York and others. The original complaint was based

on the Sherman and Clayton federal antitrust acts, the

Federal Aviation Act, and federal civil rights law. On May

28, 1985, this Court considered and rules on the “Town”’

defendants’ motion to dismiss the complaint for failure to

state a claim. It also rules on, inter alia, the plaintiff's

cross-motion for a preliminary injunction. The Town

defendants’ motion was denied in part and granted in part.

The plaintiff's cross-motion for an injunction was denied.

23a

Now, both the Town defendants and the plaintiff move,

pursuant to Rule 3(j) of the Civil’ Rules of the United

States District Court for the Eastern District of New York,

to reargue portions of their respective motions. For rea-

sons that follow, the Court: (1) grants the Town

defendants’ motion to reargue and rules in their favor on

the merits of their application; (2) grants the plaintiff's

motion to reargue in part but denies its application on

their merits; and (3) dismisses the complaint for lack of

subject matter jurisdiction.

I. FACTUAL AND PROCEDURE BACKGROUND

A. Facts

The Court will merely restate the facts it relied on for

its May 28, 1985 decision.

This action relates to a lease permitting plaintiff MCA

to conduct business as a fixed-base operator (FBO) and air

carrier (carrier) at an airport (the Airport) owned and op-

erated by the Town of East Hampton, New York (the

Town). The plaintiff is a New York corporation doing busi-

ness as an FBO and carrier at the Airport. Defendants

Parsons, Finazzo, Bullock and King are councilmen of the

Town and sit on the Town Board. Defendant Hope is the

supervisor of the Town Board. Defendant Russell Stein is

the Town’s attorney while the town employs defendant

Charles Smith as manager of the Airport. Defendant

LaVigna is the chief executive officer of defendant East

Hampton Aire (EHA), which operates as an FBO on a

year-round basis at the Airport.

On or about December 28, 1979, the plaintiff and the

Town entered into a ten-year lease denominated as a “‘Sea-

sonal Fixed Base Operator’s Agreement East Hampton

Airport Lease.” The effective span of the lease is from

January 1, 1980 to December 31, 1989, and the lease au-

thorizes MCA’s FBO activities for only 5 months per year

from May 1, to September 30 of each year. In the years

1983 and 1984, the plaintiff sought to operate beyond the

24a

annual September 30 cut-off date under the lease. How-

ever, the Town Board informed the plaintiff on each oc-

casion that such activity was not authorized under the

lease agreement. On each occasion, the plaintiff ceased

operations.

In the fall of 1984, the plaintiff filed a complaint with

the Federal Aviation Administration (FAA) charging the

Town with unjust discrimination pursuant to 49 U.S.C.

§ 1349, and under the terms of a Grant Agreement be-

tween the FAA and the Town. The objective behind the

complaint was to compel the Town to grant the plaintiff

a full-year lease. On January 7, 1985, after an investiga-

tion, the FAA found that the Town’s failure to grant the

plaintiff a full-year lease was in fact discriminatory. The

FAA also alloted the Town 30 days to rectify the situation.

On January 18, 1985, the Town Board held hearings on

the question of extending the plaintiff's lease in accordance

with the FAA’s directive. The Board never issued a final

opinion or resolution thereafter. The instant action was

commenced on February 8, 1985.

B. Procedure

On May 28, 1985, the Court heard oral argument and

- ruled on motions presented by the Town defendants and

MCA. The Town defendants moved, pursuant to Rule

12(bX6) of the Federal Rules of Civil Procedure, for an

order dismissing the complaint for failure to state a claim.

The Town defendants argued that the plaintiff's causes of

action under the Sherman Act, the Clayton Act, 42 U.S.C.

§ 1983, and 49 U.S.C. §§ 1305 and 1349 were defective.

MCA opposed the motion and moved for a preliminary

injunction, among other things. The Court: (1) dismissed

MCA’s Clayton Act claim for damages, costs and fees; (2)

dismissed part of MCA’s Federal Aviation Act claim; (3)

dismissed the plaintiff's claim under 42 U.S.C. § 1983; and

(4) denied the plaintiff's motion for an injunction. We left

—e—

25a

open MCA’s claim for damages and injunctive relief under

the Sherman Act and an injunction under the Clayton Act.

The Court also did not reach MCA’s claim under 49 U.S.C.

§ 2210(a) of the Federal Aviation Act.

By notice of motion dated June 4, 1985, the Town

defendants moved to reargue their motion to dismiss. Their

objective is to dismantle the remaining portions of MCA’s

federal antitrust claims for damages and an injunction. On

June 10, 1985, MCA cross-moved for reargument. MCA

takes issue with the Court’s dismissal of the Clayton Act

and § 1983 claims, and its denial of the preliminary in-

junction. The remainder of this opinion is devoted to the

issues raised on reargument.

II. ISSUES TO BE RECONSIDERED

Local Rule 3(j) of the Civil Rules for this Court reads

as follows:

A notice of motion for reargument shall be

served within ten (10) days after the docketing

of the court’s determination of the original mo-

tion and shall be served at least the same number

of days before the return day as was required

for the original motion. There shall be served

with the notice of motion a memorandum setting

forth concisely the matters or controlling deci-

sions which counsel believes the court has over-

looked. No oral argument shall be heard unless

the court grants the motion and specifically di-

rects that the matter shall be reargued orally.

No affidavits shall be filed by any party unless

directed by the court.

Given the language of this rule, the Court will reconsider

the Town defendants’ motion to reargue its motion to

dismiss the antitrust claims raised by MCA. The Town

defendants point out that a recent United States Court

decision is dispositive of MCA’s claims. Since the plaintiff

26a

has correctly indicated that additional factors should be

considered with respect to the dismissal of its section 1983

claim, this claim will also be reconsidered. However, there

will be no reargument of the Court’s application of the

Local Government Antitrust Act of 1974 to this case. Even

assuming, arguendo, the Act does not apply here, the Court

will demonstrate that the plaintiff's federal antitrust causes

of action are still barred under the state action doctrine.

More importantly, the plaintiff's papers on this issue merely

repeat its arguments of May 28, 1985. Finally, there will

be no reargument of the denial of the injunction. None of

the issues raised by the plaintiff were overlooked. Also,

as shall be demonstrated, the Court lacks jurisdiction to

issue such an injunction.

There is no need for oral argument here since the parties

have adequately outlined their positions in the papers be-

fore the Court.

Ill. THE ANTITRUST CLAIMS

In its May 28, 1985 decision, the Court recognized that

the state action doctrine barred antitrust actions against

states and their municipalities in many cases. Relying on

the state action standard of Community Communications

Co., Inc. v. City of Boulder, 455 U.S. 40 (1982), the Court

found that where the Town defendants had acted “‘pur-

suant to a clearly articulated and affirmatively expressed

state policy,” the Town had not demonstrated that such

policy was actively supervised by New York State

authorities. Hence, all of the plaintiff's Sherman Act claim

and part of its Clayton Act claim (to the extent injunctive

relief was sought) were left standing.

The Town defendants now direct the Court’s attention

to the decision in Town of Hallie v. City of Eau Claire,

105 S. Ct. 1713 (1985). In Town of Hallie, the Supreme

Court recently ruled that the active state supervision re-

quirement of City of Boulder “should not be imposed in

cases in which the actor is a municipality.” Id. at 1720.

27a

Here, of course, the Town defendants are members of the

municipality of the Town of East Hampton, New York.

Consequently, the remaining portion of the plaintiff's

Clayton Act claim and all of the Sherman Act claim must

fall as they are prohibited under the state action doctrine.

IV. THE SECTION 1983 CLAIM

MCA argues that the Court should not have dismissed

its section 1983 cause of action. The thrust of MCA’s

position is that the Court wrongly dismissed the civil rights

claim under the rule of Middlesex City Sewerage Authority

v. National Sea Clammers Association, 453 U.S. 1 (1981).

The Court disagrees.

Section 1983 authorizes suits to redress violations of

rights, privileges, or immunities secured by the United

States Constitution and federal statutes, if they are per-

petrated under color of state law. Maine v. Thiboutot, 448

U.S. 1, 6 (1980). However, section 1983 does not apply

where Congress has foreclosed private enforcement of a

statute through section 1983 in the enactment itself, or

where a statute is not of the kind that creates “rights”

under section 1983. Pennhurst State School and Hospital

v. Halderman, 451 U.S. 1, 28 (1981). Here, the plaintiff's

civil rights cause of action is based on provisions of the

Federal Aviation Act, namely 49 U.S.C. §§ 1305 and

1349(a). Neither of these statutes create rights.

In Guthrie v. Genessee County, 494 F. Supp. 950

(W.D.N.Y. 1980), it was explained that section 1349(a) did

not create rights. Judge Curtin accurately described the

provision as follows:

Section 1349(a) ... is ... in the nature of a law

for the protection of the general public, a pro-

vision which is part of a statutory scheme to mon-

itor how federal funds are spent. Although § 1349

does prohibit exclusive rights to the use of air-

fields upon which federal monies have been spent,

28a

this does not constitute as compelling a reason

to infer a private remedy as where a class of

persons has been granted certain rights by statute.

Id., at 959 (emphasis added).

The Court adopts this characterization of the statute.

The Court holds a similar view of section 1305(a). That

provision reads, in pertinent part, as follows:

(a) Preemption. (1) Except as authorized in par-

agraph (2) of this subsection, no State or

political subdivision thereof and no interstate

agency or other political agency of two or

more States shall enact or enforce any law,

rule, regulation, standard, or other provision

having the force and effect of law relating

to rates, routes, or services of any air carrier

having authority under subchapter IV of this

chapter to provide air transportation. (2) Ex-

cept with respect to air transportation (other

than charter air transportation) provided pur-

suant to certificate issued by the Board un-

der section 1371 of this title, the provisions

of paragraph (1) of this subsection shall not

apply to any transportation by air of persons,

property, or mail conducted wholly within the

State of Alaska.

As its plain language suggests, this statute exists solely

for the purpose of establishing the dimensions of the fed-

eral government’s authority over interstate air transpor-

tation. The provision itself does not create rights for air

carriers or FBO’s nor does it mention these parties. More

importantly, the legislative history bears out this inter-

pretation as its primary focus is on the respective spheres

of federal and state authority over interstate and intras-

tate air transportation. Under these circumstances, the

Court cannot hold that section 1305(a) creates rights for

29a

air carriers or FBO’s. See 1978 U.S. Code Cong. and Adm.

News, p. 3737.

Consequently, the civil rights claim was correctly dis-

V. THE REMAINING FEDERAL CLAIM

Count II of the complaint contains the sole remaining

federally based cause of action asserted by MCA. In Count

II, MCA alleges that the defendants violated 49 U.S.C.

§ 2210(a) by discriminating against it. The plaintiff has,

however, conceded that it did not purport to seek relief

under section 2210(a). “Town Defendants’ Reply Memo-

randum In Further Support Of Their Motion to Dismiss

The Complaint And In Opposition To Plaintiff's Motion

For A Preliminary Injunction,” p. 15. Even so, a claim

falling under section 2210(a) cannot withstand scrutiny un-

der the rule of Cort v. Ash, 422 U.S. 66 (1975). Section

2210(a) directly concerns the relationship between airports

and the Department of Transportation, and not the rights

of FBO’s and air carriers as against airports. But more

importantly, it is the right of the Secretary of Transpor-

tation to enforce the provisions of section 2210(a). Private

parties share no such right under the statute. Hence, there

is no viable cause of action under section 2210.

VI. CONCLUSION

For the foregoing reasons, the plaintiff’s federal claims

are dismissed. The Court no longer has jurisdiction over

this matter since the remaining claims are based on state

iaw and all of the parties are New York State domicili-

aries. Consequently, the complaint is hereby dismissed.

IT IS

SO ORDERED.

/s/ HENRY BRAMWELL

30a

U. S. D. J.

Dated: Brooklyn, New York

September 4th, 1985

3la

APPENDIX D

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

No. 578-August Term 1985

(Argued November 25, 1985

Decided February 14, 1986)

Docket No. 85-7752

MONTAUK-CARIBBEAN AIRWAYS, INC.,

d/b/a/ LONG ISLAND AIRLINES,

Plaintiff-A ppellant,

Vv.

JUDITH HOPE, RANDALL PARSONS, ANTHONY BULLOCK,

MICHAEL J. FINAzzo, and HucGH KING, Individually and as

the Town Board of the Town of East Hampton, CHARLES

T. SMITH, RUSSELL STEIN, East HAMPTON AIRE, INC., and

FRANK LA VIGNA,

Defendants-A ppellees.

Before:

TIMBERS, PIERCE and MINER,

Circuit Judges.

Appeal by Montauk-Caribbean Airways, Inc. from a

judgement entered October 1, 1985 in the Eastern District

of New York, Henry Bramwell, District Judge, dismissing

federal claims against the Town of East Hampton and

East Hampton Aire, Inc. for alleged violations of the fed-

eral antitrust laws, the Federal Aviation Act and the Fed-

eee

32a

eral Civil Rights Act, and also dismissing pendent state

claims.

Affirmed.

I. LEONARD FEIGENBAUM, Mel-

ville, N.Y., for. appellant.

Eric J. LOBENFELD, New York,

N.Y. (Sanford M. Litvack, Valerie

A. Cohen, and Donovan Leisure

Newton and Irvine, New York,

N.Y., on the brief), for appellees

Hope, Parsons, Bullock, Finazzo,

King, Smith and Stein.

THomas A. Hickey, New York,

N.Y. (Joseph J. Ceccarelli, and

Plunkett and Jaffe, New York,

N.Y., on the brief), for appellees

East Hampton Aire, Inc. and

Frank La Vigna.

TrmMBERS, Circuit Judge:

Appellant Montauk-Caribbean Airways, Inc., d/b/a Long

Island Airlines, appeals from a judgment entered October

1, 1985 in the Eastern District of New York, Henry Bram-

well, District Judge, dismissing, pursuant to Fed. R. Civ.

P.12(bX6), federal claims and pendent state claims.

Appellant commenced this action on February 8, 1985

against members of the Town Board of East Hampton,

New York; the Town’s attorney; the manager of the

Town’s airport; East Hampton Aire, Inc. (““EHA’’), a com-

petitor airline; and the latter’s chief executive officer. The

complaint alleged violations of the Sherman Act, 15 U.S.C.

§§ 1, 2 (1982); the Clayton Act, 15 U.S.C. §§ 15, 26 (1982);

the Federal Aviation Act, 49 U.S.C. §§ 1305(a), 1349(a),

during the off-season months for the benefit of EHA.

In an order dated May 28, 1985, the district court, pur-

suant to Fed. R. Civ. P. 12(bX6), dismissed the Clayton

Act, § 1983 and Federal Aviation Act claims. After the

Supreme Court’s decision in Town of Hallie v. City of Eau

Claire, ___ U.S. ___.,, 105 S.Ct. 1713 (1985), and after

reargument before the the district court, Judge Bramwell dis-

missed appellant’s Sherman Act claim for injuctive relief

and the pendent state law claims, and reaffirmed dismissal

of the § 1983 claim.

We entered an injunction prohibiting interference with

appellant’s operations pending this appeal. For the reasons

set forth below, we dissolve the injunction which we en-

tered pending appeal and we affirm the judgement of the

district court dismissing appellant’s claims.

This dispute arises from appellant’s desire to obtain a

lease permitting it to serve as a year-round fixed-base air

carrier operator at he East Hampton Airport owned and

operated by the Town of East Hampton. In 1978, appellant

and the Town entered into a lease under which appellant

was to operate as a fixed-base operator and air carrier at

the airport. In December. 1979, appellant and the Town

entered into a ten-year lease which did not require ap-

pellant to provide year-round services. Appellant thereafter

operated on a seasonal basis between May 1 and Septem-

ber 30 of each year. In 1983 and 1984, apparently after

the arrival of new management, appellant sought permis-

34a

sion to operate after September 30. The Town Board in-

formed appellant that the lease did not authorize such post-

seasonal operations.

In the Fall of 1984, appellant filed a complaint with the

Federal Aviation Administration (FAA) under 49 U.S.C.

§ 1349, claiming that the Town of East Hampton unjustly

discriminated against appellant. The FAA concluded that

the failure to grant a full-year lease was discriminatory

The Town, however, did not act on the FAA decision in

favor of appellant.

On February 8, 1985, appellant commenced the instant

action, seeking the relief set forth above. Appellees, pur-

suant to Fed. R. Civ. P. 12(bX6), moved to dismiss the

claims. On May 28, 1985 the district court dismissed the

Clayton Act claims for damages on the basis of the Local

Government Antitrust Act of 1984, 16 U.S.C. § 35 (Supp.

II 1984) (the Act). The court also dismissed the claims

asserted under the Federal Aviation Act and § 1983. The

court thereafter granted the appellees’ motion for written

reargument pursuant to Local rule 3(j). In its decision of

September 4, 1985, the court, applying the Supreme

Court’s recent decision in Town of Hallie v. City of Eau

Claire, U.S. 105 S.Ct. 1713 (1985), dis-

missed the remaining antitrust claims under the state ac-

tion doctrine. The court also reaffirmed its decision to

dismiss the § 1983 claims; and, finding no private cause

of action under the Federal Aviation Act, dismissed those

claims as well.

Il.

The principal issue raised on appeal is whether the Act

or the state action doctrine, or both, bar appellant’s an-

' Hereafter in this opinion, when we refer to “the Act,” we mean

the Local Government Antitrust Act of 1984. When other statutes are

referred to, such as the Clayton Act, the Sherman Act, or the Federal

Aviation Act, we shall refer to them by name.

35a

titrust action against a municipality which owns and op-

erates a local airport. In determining whether the district

court, pursuant to Rule 12(b\6), properly dismissed ap-

pellant’s federal claims, we must view the factual allega-

tions in the complaint as true. Jones-Bey v. Caso, 535 F.2d

1360, 1362 (2 Cir. 1976).

The complaint alleged that appellees Town and EHA

conspired to restrain trade and create a monopoly in favor

of EHA in violation of the Clayton and Sherman Acts.

Appellant submitted to the Town Board a proposed lease

amendment which provided for the elimination of any sea-

sonal restriction on appellant’s operation. The Board held

a public hearing but reached no formal decision. The lease

has not been modified. Appellant argues that EHA has

usurped a significant share of appellant’s air carrier busi-

ness

Judge Bramwell held that the Act barred appellant’s

antitrust claim for treble damages under the Clayton Act.

The Act insulates municipalities and their representatives

from monetary claims arising under the antitrust laws.

This recently enacted statute provides:

“No damages, interest on damages, costs, or

attorney’s fees may be recovered under section 15,

15a, or 15¢ of this title from any local government,

or official or employee thereof acting in an official

capacity.”

15 U.S.C. § 35.

Congress enacted this statute prior to the Supreme

Court’s decision in Hallie. Its legislative history reflects

the desire of Congress to broaden the shield protecting

municipalities from antitrust claims for damages. The stat-

ute was enacted, in part, “in response to concern with

Supreme Court decisions over the past few years that

appear to have limited the extent that antitrust immunity

applicable to States will be accorded to local govern-

36a

ments.”” H.R. Rep. No. 98-965, 98th Cong., 2d Sess. 2,

reprinted in 1984 U.S. Code Cong. & Ad. News 4602,

4603. Thus, it is fair to assume that Congress intended

greater protection for municipalities than the parameters

of the pre-Hallie state action doctrine provided.

Appellant argues, however, that, in the absence of an

articulated state authorization for the town board mem-

bers’ conduct, appellees were not acting “in an official

capacity,’’ and therefore fall outside the protection of the

court.

This narrow interpretation, which would provide no bet-

ter protection than that which the federal common law

afforded, is not what Congress intended.

The legislative history of the Act indicates that Con-

gress, concerned with the number of antitrust actions

brought against municipalities and the limited immunity

available under the then-existing state action exemption,

intended that the phrase “acting in an official capacity”’

be given broad meaning. An affirmative grant of authority

is not required.

“The definition of official local conduct is intended

to be as broad as the local government’s authority—

encompassing ‘legislative, regulatory, executive, ad-

ministrative, or judicial authority’ of a local govern-

ment. The Committee assumes that this authority will

most often stem from broad home rule grants, or from

more specific State grants of authority to the local

entity. The definition thus removes any requirement

imposed by the Supreme Court in Community Com-

munications Co. v. City of Boulder, [455 U.S. 389

(1978)] that there be a specific and affirmative grant

of a State’s authority to the local government in every

instance.”

H.R. Rep. No. 98-965, 98th Cong., 2d Sess. 20-21, re-

printed in 1984 U.S. Code Cong. & Ad. News 4602, 4621-

22.

37a

In light of the desire of Congress to grant broad im-

munity from damages for noncriminal acts by local officials

and the authority which New York law grants to munic-

ipalities in the operation of local airports,? we believe that

the district court was correct in holding that appellant

failed to state a claim upon which relief can be granted

under the Clayton Act for damages against the Town of

East Hampton. The Act bars such a claim.

The Act, however, does not apply to claims for injunc-

tive relief under the Sherman Act. See 15 U.S.C. § 35;

H.R. Rep. No. 98-965, supra, reprinted in 1984 U.S. Code

Cong. & Ad News 4602, 4603.

The question therefore of whether the court properly

dismissed the instant claims must be examined in light of

the Supreme Court’s decision in Hallie. There, certain

townships sought injunctive relief, alleging that the City

of Eau Claire violated the Sherman Act by acquiring a

monopoly over the provision of sewage treatment services

and by tying such services to sewage collection and trans-

portation services. In holding that the municipality was

immune from such antitrust actions, the Court reexamined

the line of cases which established the state action im-

munity doctrine. Parker v. Brown, 317 U.S. 341 (1943);

City of Lafayette v. Louisiana Power & Light Co., 435

U.S. 389 (1978); Community Communications Co. v. City

of Boulder, 455 U.S. 40 (1982).

Hallie broadened the immunity available to municipali-

ties. To be exempt from antitrust violations, municipalities

must establish “that their anticompetitive activities were

authorized by the State ‘pursuant to state policy to dis-

place competition with regulation or monopoly public ser-

vice.’ ”’ Hallie, supra, 105 S.Ct. at 1716 (quoting City of

Lafayette, supra, 435 U.S. at 413). A municipality will be

? See N.Y. Gen. Mun. Law §§ 350-357 (McKinney 1974 & Supp. 1984-

85), referred to infra.

38a

entitled to the protection of the state action exemption

where it “demonstrate[s] that it is engaging in the chal-

lenged activity pursuant to a clearly expressed state pol-

icy.” Hallie, supra, 105 S.Ct. at 1717.

The Hallie Court, however, interpreted broadly a “clear

articulation” requirement of state policy. It is not neces-

sary for the state legislature to have stated explicitly that

it expected a municipality to engage in conduct having

anticompetitive effects. Id. at 1718. Rather, .f the legis-

lature “ ‘contemplated the kind of action complained of,’

this is sufficient to satisfy the clear articulation require-

ment of the state action test.’ Hallie, supra, 105 S.Ct.

at 1719 (quoting City of Lafayette, supra, 435 U.S. at 415).

The Court also abandoned the requirement that, to be

exempt, the state must supervise actively the municipali-

ty’s activity. Id. at 1721.

In light of the Supreme Court’s recent holding with

respect to the immunity of municipalities from antitrust

violations, we turn to the New York statutes which confer

authority on municipalities to operate local airports. Under

N.Y. Gen. Mun. Law §§ 350-357 (McKinney 1974 & Supp.

1984-85), the state legislature authorized local legislative

bodies to establish, operate and maintain local airports, to

acquire and lease real property, and to enter into exclusive

and non-exclusive contracts. Specifically, § 352 provides

that a town board operating a local airport may:

“1. Construct, develop, improve, equip, maintain

and operate the same.

2. Adopt regulations and establish fees or charges

for the use thereof, and fix civil penalties for the

violation of such regulations and provide for their en-

forcement.

3. Provide and charge for all services, concessions

or other usual or incidental facilities rendered, con-

ducted or maintained thereat.

39a

4. Purchase and sell aviation petroleum products,

aircraft accessories and parts, and provide and charge

for the servicing and repairing of aircraft, and for all

other services reasonably necessary or incidental to

the operation of such airport or landing field.

5. Lease, or sub-lease the real property or lease,

contract or otherwise agree, on an exclusive or non-

exclusive basis, for the entire operation of such air-

port or landing field, or of any part thereof, or for

the rendering of various services or the conduct of

business activities, on or at said airport or landing

field subject to the provisions of section three hundred

fifty-two-a of this chapter; provided, however, that no

such lease or contract shall be made until the gov-

erning body of the municipality shall have held a pub-

lic hearing in respect thereto on at least ten days

notice published in two newspapers having general

circulation in the municipality, and provided further

that any lease of an entire or portion of an airport

or landing field, together with the facilities thereon,

or contract for the operation of an airport or landing

field or portion thereof shall be for a term not ex-

ceeding forty years and shall expressly provide that

the said airport or landing field shall be used only

for aviation purposes and for other purposes required

for or necessary to the efficient and successful op-

eration of an airport or landing field, upon such terms

as shall require the operation of the same as a public

airport or landing field for the general use of the

public and for the benefit of such city, county, village

or town. ...

N.Y. Gen. Mun. Law § 352 (McKinney 1974 & Supp. 1984-

85). This delegation of authority declares a state policy

that municipal airport operators may enter into exclusive

lease arrangements. This effectively replaces competition

with regulation. We therefore must assume that the Mew

40a

York legislature contemplated the kind of anticompetitive

activity in which the Town of East Hampton has engaged.

In view of this broad statutory authority to enter into

exclusive or non-exclusive contracts, it was a foreseeable

result that the Town would assert the authority to deny

appellant year-long operating rights. Such conduct is a

foreseeable consequence of granting to municipalities the

power to pursue either anticompetitive action or free-mar-

ket competition in the area of airport services. The grant

of this power is inconsistent with the “‘neutral ... state

policy.” Hallie, supra, 105 S.Ct. at 1718. We hold that

the Hallie state action test therefore was complied with

in this case.*

Appellant also claims that the state action exemption of

Hallie is not available because the Federal Aviation Act,

49 U.S.C. § 1305(a), has preempted state law in this area,

Jeaving no state authorization for such anticompetitive ac-

tivity despite the New York statutes. The provision of the

Federal Aviation Act relied upon prohibits a political sub-

division from enacting any law or rule “relating to rates,

routes, or services of any air carrier. ...” 49 U.S.C.

§ 1305(aX1). This statute, however, explicitly provides that

noting in the subsection referred to should be “‘construed

to limit the authority of any State or political subdivision

thereof ... to exercise its proprietary powers and rights.”’

49 U.S.C. § 1305(bX1). The relevant inquiry therefore is

* Appellant relies on Guthrie v. Genessee County Airport, 494 F.Supp.

950, 955-57 (W.D.N.Y. 1980), where the court held that N.Y. Gen.

Mun. Law § 350-57 did not meet the City of Lafayette state action test.

We are not persuaded that Guthrie would be decided the same way

after Hallie. Guthrie relied in part on the active state supervision

requirement which the Supreme Court abandoned in Hallie. 494 F.Supp.

at 956. See Hallie, supra, 105 S.Ct. at 1721. Moreover, the Guthrie

court applied the then-existing state action test in holding that § 352

did not evince an “unambiguous intent on the part of the state leg-

islature to replace cor:petition with monopolistic public service.’’ 494

F.Supp. at 956. After Hallie, the clear articulation test is not so re-

strictive.

4la

whether the Town of East Hampton was exercising its

proprietary rights as owner of the Airport when it refused

to modify the ten-year lease to which the parties agreed

in 1979.

We find no authority to support appellant’s claim that

the Town of East Hampton, as owner of the Airport, must

allow appellant to serve as a fixed-base operator at the

East Hampton Airport year-round. Nor do we find support

for appellant’s claim that the Town is compelled to lease

to appellant the necessary equipment and services that

would permit such year-round air service.‘ Absent such

authority, the leases are valid exercises of the Town’s

proprietary rights granted under N.Y. Gen. Mun. Law

§ 352. The preemption statute, § 1305, reserves to the

states and local government this power.

Having held that the Act and the state action doctrine

bar the antitrust claims against the Town of East Hamr-

ton, there is no basis for holding that East Hampton Aire

conspired with the Town to violate the antitrust laws.

E.W. Wiggins Airways, Inc. v. Massachusetts Port Au-

thority, 362 F.2d 52, 56 (1 Cir.), cert. denied, 385 U.S.

947 (1966). See Transport Limousine of Long Island v. Port

Authority, 571 F.Supp. 576 (E.D.N.Y. 1983).

We hold that the court properly dismissed the claims

against EHA.

Ill.

Appellant also asserts that the court erred in dismissing

its claims under the Federal Aviation Act. The court held

* Since the state claims were dismissed with the federal claims, we

do not address the issue of whether either party is in breach of contract

for violation of the December 1979 lease. United Mine Workers v. Gibbs,

383 U.S. 715, 726 (1966). Appellant claims, for example, that while the

lease specifically requires that services be provided only between May

1 and September 30, its silence as to off-season services implies the

authority to operate for that portion of the year also. Resolution of

this issue is not dispositive of the federal claims.

42a

that there is no private right of action under 49 U.S.C.

§§ 1305(a), 1849(a). We agree.

To determine whether there is an implied private right

of action under the statute, we apply the factors set forth

in Cort v. Ash, 422 U.S. 66 (1975). Those factors are

whether the plaintiff is a member of the class for whose

benefit the statute was enacted; whether Congress in-

tended to create a private right of action; whether a pri-

vate right of action is consistent with the underlying

purpose of the legislative scheme; and whether the matter

is traditionally relegated to state law. 422 U.S. at 78.

Although regulation of interstate air carrier activity tra-

ditionally has been a matter of federal law, congressional

intent is the most significant of these factors. Touche Ross

& Co. v. Redington, 442 U.S. 560, 579 (1979).

We agree with those courts which have decided after

careful analysis that a private right of action is not avail-

able under § 1349%a). E.g., Hill Aircraft & Leasing Corp.

v. Fulton County, 561 F. Supp. 667, 673 (N.D. Ga. 1982),

affd, 729 F.2d 1467 (11 Cir. 1984); Guthrie v. Genesee

County Airport, supra, 494 F. Supp. at 960. The statute

provides in pertinent part that ‘[tJhere shall be no exclu-

sive right for the use of any landing area or air navigation

facility upon which Federal Funds have been expended.”’

49 U.S.C. § 1849(a).

The statute contains no explicit designation of fixed-base

operators as beneficiaries. Rather, the law was enacted to

benefit the general public as part of a statutory scheme

to monitor the expenditure of federal funds. Guthrie, su-

pra, 494 F. Supp. at 959-60. Moreover, as both the Guthrie

and Hill Aircraft courts observed, the legislative history

of § 1349(a) contains no suggestion that Congress intended

to create an implied private right of action.

Section 1305(a) of the Federal Aviation Act is a preemp-

tion statute which establishes the federal government’s

sphere of power over the states in areas of interstate air

43a

transportation. There is nothing to suggest that Congress

intended to create an implied private right of action under

that statute. See H.R. Rep. No. 95-1211, 95th Cong., 2d

Sess. 16, reprinted in 1978 U.S. Code Cong. & Ad. News

3737, 3751-52 (statute designed to prevent uncertainties

and conflicts where airlines provide both interstate and

intrastate service resulting in different passenger fares).

Finally, appellant asserts that the court erred in dis-

missing its claim under § 1983. The comprehensive en-

forcement scheme provided in the Federal Aviation Act

manifests congressional intent to foreclose an action under

§ 1983. Pennhurst State School & Hospital v. Halderman,

451 U.S. 1, 28 (1981); Middlesex County Sewerage Au-

thority v. National Sea Clammers Association, 453 U.S.

1, 19 (1981). Appellant must look to the administrative

agency responsible for the enforcement of these provisions.

Caceres Agency Inc. v. Trans World Airways, 594 F.2d

932 (2d Cir. 1979).

We hold that the district court was correct in dismissing

appellant’s claims under the Federal Aviation Act and

§ 1983.

IV.

To summarize: The district court correctly held that the

Local Government Antitrust Act of 1984 bars appellant’s

Clayton Act claims for damages. The broad delegation of

authority which N.Y. Gen. Mun. Law §§ 350-357 confers

on municipalities in the operation of local airports evi-

dences an intent to displace competition with regulation.

The state legislature must have contemplated the kind of

anticompetitive conduct that would result. Under Hallie,

this is sufficient to exempt the Town of East Hampton ~

from both the Clayton and Sherman Act antitrust claims.

Since Congress expressed no intent to create private rights

of action under the Federal Aviation Act, the court prop-

44a

erly dismissed the claims under the Federal Aviation Act

and § 1983.

The injunction pending appeal is dissolved and the judg-

ment of the district court is affirmed substantially for the

reasons set forth in Judge Bramwell’s opinions of May 28,

1985 and September 4, 1985.

Affirmed.

45a

APPENDIX E

UNITED STATES COURT OF APPEALS

SECOND CIRCUIT

Docket No. 85-7752

At a stated term of the United States Court of Appeals,

in and for the Second Circuit, held at the United States

Courthouse, in the City of New York, on the 27th day of

March one thousand nine hundred and eighty-six

MONTAUK-CARIBBEAN AIRWAYS, INC., d/b/a

LONG ISLAND AIRLINES,

Plaintiff-Appellant,

Vv.

JUDITH HOPE, RANDALL PARSONS, ANTHONY BULLOCK,

MICHAEL J. FINAZZO, and HuGH KING,

Individually and as the Town Board of the Town of

East Hampton, CHARLES T. SMITH, RUSSELL STEIN, EAST

HAMPTON AIRE, INC., and FRANK LA VIGNA,

Defendants-A ppellees.

A petition for rehearing containing a suggestion that

the action be reheard in banc having been filed herein by

counsel for the Appellant MONTAUK-CARIBBEAN AIR-

WAYS, INC.

Upon consideration by the panel that heard the appeal,

it is

Ordered that said petition for rehearing is DENIED.

It is further noted that the suggestion for rehearing in

banc has been transmitted to the judges of the court in

46a

regular active service and to any judge that heard the

appeal and that no such judge has requested that a vote

be taken thereon.

/s/ ELAINE B. GOLDSMITH

ELAINE B. GOLDSMITH

Clerk

47a

APPENDIX F

US Department

of Transportation

Federal Aviation

Administrati

January 12, 1984

Mr. Randall T. Parsons

Councilman

Town of East Hampton

159 Pantigo Road

East Hampton, New York 11937

Your inquiry of December 15, 1983, to Ms. Alkalay of our

New York Regional Office was forwarded to my office for

a reply. The questions you have raised are not susceptible

to simple answers. Initially, I am certain you understand

that while every situation may be factually unique, there

are some applicable general concepts.

As a general proposition, the Town of East Hampton as

an airport operator, which has received Federal funds,

cannot grant exclusive rights or discriminate on economic

grounds in its dealings with commercial operators or fixed

base operators who wish to use the airport’s facilities. To

summarily or arbitrarily reject a proposal by an FBO to

operate at the East Hampton Airport would violate these

concepts which are established by Federal law and part

of grant agreements between the FAA and the Town of

East Hampton. However, East Hampton does have the

right to establish reasonable rules and regulations appli-

cable to all fixed base operators and to apply terms and

non-discriminatory basis as well as negotiate the terms and

conditions of an agreement or lease between itself and an

FBO. In short, while an airport operator cannot summarily

or arbitrarily reject a proposal by an FBO to operate at

48a

its airport, at the same time a prospective FBO does not

have the right to insist that access to a particular airport

be unconditional or on terms and conditions it dictates.

Your second question concerns the effect of the Airline

Deregulation Act of 1978 (P.L. 95-504). That Act does have

a significant effect on every airport operator, including

East Hampton, particularly with respect to the ability, or

more precisely the inability, of an airport operator to use

or apply economic factors in making decisions regarding

use of its facilities by commercial operators. The Dere-

gulation Act amended Section 102 of the Federal Aviation

Act of 1958 to explicitly establish the concepts of com-

petitive market forces and maximum reliance on those

forces as the basis for commercial air service. [See 49

U.S.C. 1302] Additionally, that Act added section 105 to

the Federal Aviation Act which expressly prohibits any

State or local governmental body from enacting any law,

rule, or regulation related to the rates, routes, or services

of any air carrier authorized to operate pursuant to Title

IV of the Federal Aviation Act. [See 49 U.S.C. 1305(a)]

I regret that we cannot be more explicit in responding to

your questions but since we are not privy to all of the

facts and circumstances involved in your specific situation,

we must of necessity limit our response to the general

concepts outline above. These concepts provide substantial

but not unrestricted latitude to both airport operators and

fixed base operators to negotiate the terms and conditions

of an agreement regarding the use of airport facilities

without injecting the Federal government into that proc-

ess.

Sincerely,

/s/ J. E. Murpock III

J. E. Murpock III

Chief Counsel

49a

APPENDIX G

US Department

of Transportation

Federal Aviation

Administration

Nov 21 1984

Russel S. Stein, Esq.

Town Attorney

Town of East Hampton

159 Pantigo Road

East Hampton, New York 11937

Dear Mr. Stein:

Complaint of Discrimination at East Hampton Airport

Our Airports Division has concluded its preliminary inves-

tigation of Montauk Caribbean Airlines d/b/a Long Island

Airlines’ complaint of discrimination at East Hampton Air-

port. As you know,, Long Island Airlines alleges that the

Town of East Hampton, the owner and operator of East

Hampton Airport has refused, among other things, to al-

low it to operate at the airport on a year-round basis and

claims that this refusal constitutes a violation of the grant

agreement assurances and the Federal Aviation Act of

1958. Attached are copies of Long Island Airlines’ alle-

gations. Our preliminary investigation has focused pri-

marily on the issue of Long Island Airlines’ request to

provide a year-round service as it is now being forced to

cease operations. Our investigation into Long Island Air-

lines’ other allegations is continuing.

Our investigation imdicates that Long Island Airlines for-

mally requested permission from the Town of East Hamp-

ton to operate on a year-round basis in December 1983.

To date, the Town has failed to act on this request. While

50a

our investigators have spoken with several people from

the Town, we have been unable to discern any valid rea-

sons for this inordinate delay. We, therefore, consider this

delay to be tantamount to a denial of the request.

The Town is obligated by grant agreement with the FAA

to operate the Airport “for the use and benefit of the

public, on fair and reasonable terms, and without unjust

discrimination.” (Assurance 20, Grant Agreement dated

September 29, 1983). It is also prohibited from granting

an exclusive right to use of the airport by Section 308 of

the Federal Aviation Act of 1958, 49 U.S.C. Section 1349.

We will be forced to conclude that the Town’s refusal to

grant Long Island Airlines permission to operate on a

year-round basis is in violation of its grant agreements

and the Federal Aviation Act unless the Town articulates

nondiscriminatory reasons for its refusal. We would ap-

preciate your response to Long Island Airlines’ allegations

within ten days. If we do not hear from you within that

time, we shall have no choice but to conclude our inves-

tigation without the benefit of your response.

Sincerely,

/s/ THomas C. HALLORAN

Tuomas C. HALLORAN

Regional Counsel, AEA-7

5la

APPENDIX H

US Department

of Transportation

Federal Aviation

Administration

January 7, 1985

Russell S. Stein, Esq.

Town of East Hampton

159 Pantigo Road

East Hampton, NY 11937

Dear Mr. Stein:

Montauk-Carribbean Airlines Lease

We have concluded our investigation of Montauk-Caribbean

Airlines (MCA), Inc.’s allegation of discrimination at East

Hampton Airport by reason of the Town of East Hamp-

ton’s refusal of MCA’s request to operate year-round. In

reaching our conclusion, we have carefully considered

MCA’s allegations, as well as the Town’s response, the

history of correspondence between the parties and the re-

sults of our Airports Division investigation of this matter.

Based on our review, we have determined the facts to be

as follows:

1. MCA presently has a ten-year lease to operate as

an air taxi and a fixed base operator (FBO) at East

Hampton Airport from May 1 through September 30.

The lease term ends in December 1989. MCA has an

option to renew the lease for an additional ten years

at a rate to be agreed upon in 1989.

2. While the lease is a seasonal lease, it does require

MCA to assume year-round operation in the event the

present year-round FBO ceases to operate.

52a

3. MCA has sought for more than one year to operate

from October 1 through April 30 or, in other words,

to operate year-round.

4. MCA formally requested permission to operate year-

round in December 1983, by presenting to the Town

an amendment to its current lease. The amendment

would have provided for year-round operation effec-

tive on the date of signing.

5. MCA’s proposed amendment was not executed by

the Town.

6. By letter dated December 15, 1983, the Town of-

fered MCA a year-round lease effective October 1985,

without any explanation of the reasons for their delay.

7. By letter dated January 24, 1984, MCA, through

its attorney Stuyvesant Wainwright II, indicated that

it was amenable to commencing year-round status on

October 1, 1984. The letter also raised several other

issues regarding the Town’s offer which are not rel-

evant to this investigation.

8. To date, the Town has refused to allow MCA to

begin immediate year-round operations. In its re-

sponse to MCA’s allegations, the Town cites, among

other things, MCA’s failure to provide it with a draft

lease, although it is clear that MCA did provide the

Town with a draft amendment ot the lease. The Town

also cites MCA’s failure to halt operations in October

1984. This, however, cannot be construed as reasons

for failing to approve the proposed lease amendments

in the ten months preceding this date.

9. The Town has scheduled a public hearing for Jan-

uary 18, 1985, to determine whether a second year-

round FBO is in the best interests of the Town and,

if it is not, whether the Town can limit year-round

fixed base operations cnsistent with federal law. The

Town’s decision to hold a public hearing, after offer-

53a

ing MCA a year-round lease beginning in October

1985, can only be construed as another delaying at-

tempt by the Town.

We conclude from these facts that the Town’s refusal for

more than one year to grant MCA permission to operate

year-round without substantive reasons, is tantamount to

granting the present year-round FBO an exlusive right

from October 1 through April 30 and indicates that MCA

is not being treated on fair and reasonable terms and

without ‘injust discrimination. We believe this constitutes

a violati.n of Section 308 of the Federal Aviation Act of

1958, 49 U.S.C. Section 1349, and a violation of Assurance

20 of the Town’s grant agreements with the Federal Avia-

tion Administration.

If the Town does not rectify this situation within thirty

days, we will have no choice but to find the Town of East

Hampton in non-compliance with its grant agreements.

Sincerely,

/s/ THomas C. HALLORAN

THOMAS C. HALLORAN

Regional Counsel

APPENDIX I

US Department

of Transportation

Federal Aviation

Administration

Apr 9 1985

Sanford M. Litvack, Esq.

Donovan, Leisure, Newton & Irvine

30 Rockerfeller Plaza

New York, New York 10112

Re: East Hampton—Montauk-Caribbean

Dear Mr. Litvack:

As I am sure you know, the Federal Aviation Adminis-

tration has received a complaint by Montauk-Caribbean

against the Town of East Hampton. The allegations con-

tained in that complaint are both serious and significant

in terms of Federal issues.

Recently, we have been provided with copies of various

correspondence passing between you and Mr. Feigenbaum,

counsel for Montauk-Caribbean, as well as copies of various

newspaper accounts of public statements concerning this

controversy. We see in those statements and in your letter

of March 15, the potential for perhaps resolving at least

one of the pending issues, specifically the ability of Mon-

tauk-Caribbean to obtain access to the East Hampton Air-

port in order to conduct its air carrier flight operational

activities.

Your letter indicates that you view Montauk-Caribbean as

having two separate and distinct roles, one as air carrier

and one as a fixed base operator (FBO). In the former

role, you indicate that “it is at best an open question as

to whether your client [Montauk-Caribbean] was ever told

55a

it could not operate as an air carrier (as opposed to an

FBO) on a year-round basis.”” In the Southampton Press

of January 24 Mr. Stein, the East Hampton Town

Attorney, is reported to have indicated that the Town has

no objection to Montauk-Caribbean providing year-round

service to the airport.

If an accurate understanding of the position of the Town

of East Hampton is that Montauk-Caribbean may operate

at East Hampton as an air carrier with a right to provide

all of the support services to itself (fueling, ground han-

dling, baggage, counter space, etc.), we see no reason why

Montauk-Caribbean could not start such service immedi-

ately. Your letter of March 15 indicated that before pro-

viding such service Montauk-Caribbean should provide the

Town with its service plans, including proposed schedule,

flight plans, equipment to be used and other relevant in-

formation following receipt of which the Town would be

willing to meet with Montauk-Caribbean in an effort to

resolve the issue. We would call your attention to Section

105 of the Federal Aviation Act of 1958, as ammended

by the Airline Deregulation Act of 1978 [49 U.S.C. 1305].

The statute very clearly points out that no local political

body such as a state or muncipality ‘shall enact or enforce

any law, rule, regulation, standard or other provision hav-

ing the force and effect of law relating to rates, routes,

or services of any air carrier.’’ Since the Town of East

Hampton is without authority to regulate the “rates,

routes, or services of any air carrier,” we do not under-

stand the Town’s need for information concerning Mon-

tauk-Caribbean’s proposed schedule, flight plans, etc., as

a prerequisite to ‘an effort to resolve the issue amicably.”

In fact, assuming the position of the Town vis-a-vis Mon-

tauk-Caribbean in its role as an air carrier is that they

can operate at the East Hampton Airport on a year-round

basis, we see no issue as to their initiation of such service.

If our assumption, or interpretation and understanding of

your letter and the position of the Town is erroneous, we

56a

would appreciate your advising us of that as soon as pos-

sible. In that circumstance, we would also appreciate your

advising us of exactly what the Town’s position is on this

issue and the basis for that position.

We realize there is an extensive history to this contro-

versy. We are interested in finding out if there is a way

to effect a resolution of these issues. It appears to us that

resolution of Montauk-Caribbean’s rights to operate as an

air carrier are resolvable easily and quickly. We recognize

that the question of its right to serve East Hampton as

an FBO, i.e., its offering of its ground-handling services

to third parties, may not be as readily resolved. If the

issue of Montauk-Caribbean’s air carrier operations can be

resolved, perhaps it may lead to further solutions, and the

FAA is willing to assist in that process.

In order to prevent any misunderstanding or confusion, I

have taken the liberty of sending a copy of this letter to

Mr. Feigenbaum. From our perspective, we consider this

letter to be a matter between counsel for the purpose of

exploring the potential for resolving issues and, therefore,

do not intend to get involved in any publicity or other

public debate with respect to either our views and opinions

or characterizing the views and opinions of either the Town

or Montauk-Caribbean.

Sincerely,

/s/ J. E. Murpocxk III

J. E. Murpocx III

Chief Counsel

ec: I. Leonard Feigenbaum, Esq.

57a

APPENDIX J

U.S. CONSTITUTION ARTICLE VI

Clause 2. Supreme law.

This Constitution, and the Laws of the United States which

shall be made in Pursuance thereof; and all Treaties made,

or which shall be made, under the Authority of the United

States, shall be the supreme Law of the Land; and the

Judges in every State shall be bound thereby, any Thing

in the Constitution or Laws of any State to the Contrary

notwithstanding.

15 USCS

§ 1. Trusts, etc., in restraint of trade illegal; penalty

Every contract, combination in the form of trust or oth-

erwise, or conspiracy, in restraint of trade or commerce

among the several States, or with foreign nations, is here-

by declared to be illegal. Every person who shall make

any contract or engage in any combination or conspiracy

hereby declared to be illegal shall be deemed guilty of a

felony, and, on conviction thereof, shall be punished by

fine not exceeding one million dollars if a corporation, or,

if any other person, one hundred thousand dollars, or by

imprisonment not exceeding three years, or by both said

punishments, in the discretion of the court.

(July 2, 1890, ch. 647, § 1, 26 Stat. 209; Aug. 17, 1937, ch.

690, Title VII, §1, 50 Stat. 698; July 7, 1955, ch. 281, 69

Stat. 282, Dec. 21, 1974, Pub. L. 93-528, § 3, 88 Stat. 1708;

Dec. 12, 1975, Pub. L. 94-145, §2, 89 Stat. 801.)

§ 2. Monopolizing trade a felony; penalty

Every person who shall monopolize, or attempt to mo-

nopolize, or combine or conspire with any other person or

persons, to monopolize any part of the trade or commerce

among the several States, or with foreign nations, shall

be deemed guilty of a felony, and, on conviction thereof,

shall be punished by fine not exceeding one million dollars

if a corporation, or, if any other person, one hundred

thousand dollars, or by imprisonment not exceeding three

years, or by both said punishments, in the discretion of

the court.

(July 2, 1890, ch. 647, § 2, 26 Stat. 209; July 7, 1955, ch.

281, 69 Stat. 282; Dec. 21, 1974, P. L. 93-528, §3, 88

Stat. 1708.)

§ 26. Injunctive relief for private parties; exception

Any person, firm, corporation, or association shall be en-

titled to sue for and have injunctive relief, in any court

of the United States having jurisdiction over the parties,

against threatened loss or damage by a violation of the

antitrust laws, including sections two, three, seven and

eight of this act [15 USCS §§ 13, 14, 18, and 19], when

and under the same conditions and principles as injunctive

relief against threatened conduct that will cause loss or

damage is granted by courts of equity, under the rules

governing such proceedings, and upon the execution of

proper bond against damages for an injunctive improvi-

dently granted and a showing that the danger of irrepar-

able loss or damage is immediate, a preliminary injunction

may issue: Provided, that nothing herein contained shall

be construed to entitle any person, firm, corporation, or

association, except the United States, to bring suit in eq-

uity for injunctive relief against any common carrier sub-

ject to the provisions of the Act to regulate commerce,

approved February fourth, eighteen hundred and eighty-

seven [49 USCS §1 et seq.] in respect of any matter

subject to the regulation, supervision, or other jurisdiction

of the Interstate Commerce Commission. (Oct. 15, 1914,

c. 323, § 16, 38 Stat. 737.)

42 USCS

§ 1983. Civil action for deprivation of rights

Every person who, under color of any statute, ordinance,

regulation, custom, or usage, of any State or Territory or

the District of Columbia, subjects, or causes to be sub-

59a

jected, any citizen of the United States or other person

within the jurisdiction thereof to the deprivation of any

rights, privileges, or immunities secured by the Constitu-

tion and laws, shall be liable to the party injured in an

action at law, suit in equity, or other proper proceeding

for redress. For the purposes of this section, any Act of

Congress applicable exclusively to the District of Columbia

shall be considered to be a statute of the District of Co-

lumbia.

(R. S. § 1979; Dec. 29, 1979, P. L. 96-170, § 1, 93 Stat.

1284.)

49 USCS

§ 1305 Federal preemption

(a) Preemption. (1) Except as provided in paragraph (2)

of this subsection, no State or political subdivision thereof

and no interstate agency or other political agency of two

or more States shall enact or enforce any law, rule,

regulation, standard, or other provision having the force

and effect of law relating to rates, routes, or services

of any air carrier having authority under title IV of this

Act [49 USCS §§ 1371 et seq.] to provide interstate air

transportation.

(2) Except with respect to air transportation (other than

charter air transportation) provided pursuant to a cer-

tificate issued by the Board under section 401 of this

Act [49 USCS § 1371], the provisions of paragraph (1)

of this subsection shall not apply to any transportation

by air of persons, property, or mail conducted wholly

within the State of Alaska.

(b) Proprietary powers and rights. (1) Nothing in sub-

section (1) of this section shall be construed to limit the

authority of any State or political subdivision thereof or

any interstate agency or other political agency of two

or more States as the owner or operator of an airport

served by any air carrier certificated by the Board to

60a

exercise its proprietary powers and rights.

(2) Any aircraft operated between points in the same

State (other than the State of Hawaii) which in the course

of such operation crosses a boundary between two States,

or between the United States and any other country, or

between a State and the beginning of the territorial

waters of the United States, shall not, by reason of

crossing such boundary, be considered to be operating

in interstate or overseas air transportation.

rier which on August 1, 1977, was operating primarily in

intrastate air transportation regulated by a State receives

the authority to provide interstate air transportation, any

authority received from such State shall be considered to

be part of its authority to provide air transportation re-

ceived from the Board under title IV of this Act [49 USC

§§ 1371 et seq.], until modified, suspended, amended, or

terminated as provided under such title.

(d) Definition. For purposes of this section, the term

“State” means any State, the District of Columbia, the

Commonwealth of Puerto Rico, the Commonwealth of the

Northern Mariana Islands, Guam, the Virgin Islands, and

any territory or possession of the United States.

Aug. 23, 1958. P. L. 85-726, Title I, § 105, as added Oct.

24, 1978, P.L. 95-504, § 4(a), 92 Stat. 1708.)

§ 1359. Solicitation of funds and distribution of litera-

ture; regulations.

(a) The Administrator of the Federal Aviation Adminis-

tration (hereinafter referred to as the “Administrator’’)

shall, within 90 days after the date of enactment of this

Act [enacted Feb. 15, 1980], promulgate regulations for

airports operated by the Administration to regulate the

access to public areas by individuals or by religious and

nonprofit organizations (as defined in section 501(cX3) of

the Internal Revenue Code of 1954) (26 USCS § 501(cX3)]

for the purpose of soliciting funds or distributing materials.

6la

(b) In promulgating regulations under this section the Ad-

ministrator shall consider requiring any individual or or-

ganization described in subsection (a) to submit an

application for a permit to engage in the soliciting of funds

or the distribution of materials. In considering such an

application the Administrator may require that—

(1) a responsible individual representative of the appli-

cant shall be designated to represent the organization.

(2) each individual participating in any solicitation or

distribution will display a proper identification approved

by the Administrator,

(3) the number of individuals engaged in any solicitation

or distribution at any one time shall not exceed a rea-

sonable number, in keeping with the need for free move-

ment in and operation of the airports as provided for

by the permit,

(4) the solicitation or distribution be confined to limited

areas and times, and

(5) no individual or organization which holds a permit

under this section shall be permitted to—

(A) use sound amplification or display signs (other

than signs approved by the Administrator);

(B) intentionally interfere with users of the airport;

or conduct;

(D) engage in the use of loud, threatening, or abusive

language intended to coerce, intimidate or disturb the

peace.

(cX1) The Administrator shal] consider requiring that a

copy of a permit (if such is required) be conspicuously

posted in the area in which any solicitation or distribution

is permitted.

62a

(2) The Administrator shall consider whether revocation

of approval for any permit if required and approved

under this section should occur for any violation of any

rule or regulation promulgated hereunder.

(d) Regulations intended to be promulgated under this sec-

tion shall be submitted to Congress within 30 days after

the date of enactment of this Act [enacted Feb. 18, 1980].

(Feb. 15, 1980, P. L. 96-193, Title V, § 501, 94 Stat. 58.)

§ 1506. Remedies not exclusive.

Nothing contained in this Act shall in any way abridge or

alter the remedies now existing at common law or by

statute, but the provisions of this Act are in addition to

such remedies.

(Aug. 23, 1958, P. L. 85-726, Title XI, § 1106, 72 Stat.

798).

§ 2210. Project sponsorship

(a) Sponsorship. As a condition precedent to approval of

an airport development project contained in a project grant

application submitted under this title, the Secretary shall

receive assurances, in writing, satisfactory to the Secre-

tary, that—

(1) the airport to which the project relates will be avail-

able for public use on fair and reasonable terms and

without unjust discrimination, iacluding the requirement

that (A) each air carrier using such airport (whether as

a tenant, nontenant, or subtenant of another air carrier

tenant) shall be subject to such iondiscrimination and

substantially comparable rates, fees, rentals, and other

charges and such nondiscriminatory and substantially

comparable rules, regulations, and conditions as are ap-

plicable to all such air carriers which make similar use

of such airport and which utilize similar facilities, subject

to reasonable classification such as tenants or nonten-

ants, and combined passenger and cargo flighvs or all

cargo flights, and such classification or status as tenant

63a

shal! not be unreasonably withheld by any airport pro-

vided an air carrier assumes obligations substantially

similar to those already imposed on tenant air carriers,

and (B) each fixed-based operator at any airport shall

be subject to the same rates, fees, rentals, and other

charges as are uniformly applicable to all other fixea-

based operators making the same or similar uses of such

airport utilizing the same or similar facilities, and (C)

each air carrier using such airport shall have the service

itself or to use any fixed-based operator that is author-

ized by the airport or permitted by the airport to serve

any air carrier at such airport;

(2) there will be no exclusive right for the use of the

airport by any person providing, or intending to provide,

aeronautical services to the public. For purposes of this

paragraph, the providing of services at an airport by a

single fixed-based operator shall not be construed as an

exclusive right if if would be unreasonably costly, bur-

densome, or impractical for more than one fixed-based

operator to provide such services, and if allowing more

than one fixed-based operator to provide such services

would require the reduction of space leased pursuant to

an existing agreement between such single fixed-based

operator and such airport;

(3) the airport and all facilities thereon or connected

therewith will be suitably operated and maintained, with

due regard to climatic and flood conditions;

(4) the aerial approaches to the airport will be ade-

quately cleared and protected by removing, lowering,

relocating, marking, or lighting or otherwise mitigating

existing airport hazards and by preventing the estab-

lishment or creation of future airport hazards;

‘(5) approvriate action, including the adoptions of zoning

laws has been or will be taken, to the extent reasonable,

to restrict the use of lund adjacent to or in the im-

mediate vicinity of the airport to activities and purposes

64a

compatible with normal airport operations, including

landing and takec“f of aircraft;

(6) all of the facilities of the airport developed with

Federal financial assistance and all those usable for land-

ing and takeoff of aircraft will be available to the United

States for use by Government aircraft in common with

other aircraft at all times without charge, except, if the

use by Government aircraft is substantial, charge may

be made for a reasonable share, proportion to such use,

of the cost of operating and maintaining the facilities

used;

(7) the airport operator or owner will furnish without

cost to the Federal Government for use in connection

with any air traffic control or navigation activities, or

weather-reporting and communication activities related

to air traffic control, any areas of land or water, or

estate therein, or rights in buildings of the sponsor as

the Secretary considers necessary or desirable for con-

struction at Federal expense of space or facilities for

such purposes;

(8) all project accounts and records will be kept in ac-

cordance with a standard system of accounting pre-

scribed by the Secretary after consultation with

appropriate public agencies;

(9) the airport operator or owner will maintain a fee

and rental structure for the facilities and services being

provided the airport users which will make the airport

as self-sustaining as possible under the circumstances

existing at the particular airport, taking into account

such factors as the volume of traffic and economy of

collection, except that no part of the Federal share of

an airport development or airport planning project for

which a grant is made under this title or under the

Federal Airport Act or the Airport and Airway Devel-

opment Act of 1970 shall be included in the rate base

65a

in establishing fees, rates, and charges for users of that

airport:

(10) the airport operator or owner will submit to the

Secretary such annual or special airport financial and

operations reports as the Secretary may reasonably re-

quest;

(11) the airport and all airport records will be available

for inspection by any duly authorized agent of the Sec-

retary upon reasonable request;

(12) all revenues generated by the airport, if it is a

public airport, will be expended for the capital or op-

erating costs of the airport, the local airport system, or

other local facilities which are owned or operated by the

owner or operator of the airport and directly related to

the actual transportation of passengers or property: Pro-

vided, however, that if covenants or assurances in debt

obligations previously issued by the owner or operator

of the airport, or provisions in governing statutes con-

troling the owner or operator’s financing, provide for

the use of the revenues from any of the airport owner

or operator’s facilities, including the airport, to support

not only the airport but also the airport owner or op-

erator’s general debt obligations or other facilities, then

this limitation on the use of all other revenues generated

by the airport shall not apply; and

(13) the airport operator or owner who receives a grant

for the purchase of land for noise compatibility purposes

which is con.titioned on the disposal of the acquired land

at the earliest practicable time will, subject to the re-

tention or reservation of any interest or right therein

necessary to insure that such land is used only for pur-

poses which are compatible with the noise levels of the

operation of the airport, use its best efforts to so dispose

of such land. The proceeds of such disposition shall be

(A) refunded to the United States for the Trust Fund

on a basis proportionate to the United State share of

66a

the cost of acquisition of such land, or (B) reinvested

in an approved project, pursuant to such regulations as

the Secretary shall prescribe.

(b) Compliance. To insure compliance with this section,

the Secretary shall prescribe such project sponsorship re-

quirements, consistent with the terms of this title, as the

Secretary considers necessary. Among other steps to in-

sure such compliance, the Secretary is authorized to enter

into contracts with public agencies on behalf of the United

States. Whenever the Secretary obtains from a sponsor

any area of land or water, or estate therein, or rights in

buildings of the sponsor and constructs space or facilities

thereon at Federal expense, the Secretary is authorized

to relieve the sponsor from any contractual obligation en-

tered into under this title, the Airport and Airway De-

velopment Act of 1970, or the Federal Airport Act to

provide free space in airport buildings to the Federal Gov-

ernment to the extent the Secretary finds that space no

longer required for the purposes set forth in paragraph

(7) of subsection (a) of this section.

airport development project under this title, each sponsor

of an airport shall undertake reasonable consultations with

affected parties using the airport at which such project is

proposed.

(Sept. 3, 1982, P. L. 97-248, Title V, § 511, 96 Stat. 686.)

N.Y. Gen. Mun. Law § 352

(McKinney 1974 & Supp. 1984-85)

“1. Construct, develop, improve, equip, maintain and

operate the same.

2. Adopt regulations and establish fees or charges for

the use thereof, and fix civil penalties for the violation of

such regulations and provide for their enforcement.

$7a

3. Provide and charge for all services, concessions or

other usual or incidental facilities rendered, conducted or

maintained thereat.

4. Purchase and sell aviation petroleum products, air-

craft accessories and parts, and provide and charge for

the servicing and repairing of aircraft, and for all other

services reasonably necessary or incidental to the operation

of such airport or landing field.

5. Lease, or sub-lease the real property or lease, con-

tract or otherwise agree, on an exclusive or non-exclusive

basis, for the entire operation of such airport or landing

field, or of any part thereof, or for the rendering of various

services or the conduct of business activities, on or at said

airport or landing field subject to the provisions of section

three hundred fifty-two-a of this chapter; provided, how-

ever, that no such lease or contract shall be made until

the governing body of the municipality shall have held a

public hearing in respect thereto on at least ten days notice

the municipality, and provided further that any lease of

an entire or portion of an airport or landing field, together

with the facilities thereon, or contract for the operation

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.