# Petition for Writ of Certiorari — Montauk-Caribbean Airways, Inc. v. Hope > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_2091%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1986 - **Citation:** 479 U.S. 872 ## Text ji c 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 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. 2 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. 3 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 4 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. 5 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. 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 7 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 8 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 9 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 10 (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”’ 11 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 12 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 13 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 14 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- 15 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. 16 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. 17 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. 18 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, 19 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. 20 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, 21 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. 22 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 la 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 2a 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. 3a 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 4a 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. 5a 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 6a 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 7a 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 8a 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 9a 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. I, 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. HALL [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385018_2091%3A1. Public record. Not legal advice.