Petition for Writ of Certiorari — Arapahoe County Public Airport Authority v. Federal Aviation Administration
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\ Supreme Court, U.S.
! FILED
O01 226 Aue 3 2008
No.
OFFICE OF THE CLERK
In The
Supreme Court of the United States
a
ARAPAHOE COUNTY PUBLIC AIRPORT AUTHORITY,
Petitioner,
FEDERAL AVIATION ADMINISTRATION,
Respondent.
¢
On Petition For A Writ Of Certiorari
To The United States Court Of Appeals
For The Tenth Circuit
>
PETITION FOR WRIT OF CERTIORARI
*
RONALD S. LOSER
BRIAN A. MAGOON *
Breca & Winters P.C.
1700 Lincoln Street, Suite 2222
Denver, Colorado 80203
(303) 866-9400
re Attorneys for Petitioner
Arapahoe County Public Airport
Authority
* Counsel of Record
COCKLE LAW BRIEF PRINTING CO. (800) 225-6964
OR CALL COLLECT (402) 342-2831
QUESTION PRESENTED
Whether an airport proprietor, pursuant to the pro-
prietary powers exception, 49 U.S.C. § 41713(b)(3), and
the Supremacy Clause of the United States Constitution,
U.S. Const. Article VI, cl. 2, may ban an aeronautical use
at its airport, such as scheduled passenger service, as
necessary for the safe operation of its airport or to serve
the civil aviation needs of the public, when the airport
proprietor is expressly granted such power by federal
regulation and federal grant agreement and when the
aeronautical use had not previously operated at the air-
port.
ll
PARTIES TO THE PROCEEDING
The following entities are parties to the United States
Court of Appeals for the Tenth Circuit opinion:
The Arapahoe County Public Airport Authority
The Federal Aviation Administration
The City of Greenwood Village (Intervenor)
iii
TABLE OF CONTENTS
Page
QUESTION PRESENTED......................0000 i
PARTIES TO THE PROCEEDING .................. ii
TABLE OF AUTHORITIES ....................0000. Vv
SOMEONE WONEMIOU oon cccccccccccscccccccccucscaces 1
Gt Shak bd cw eowendales wneensre ees 2
CONSTITUTIONAL PROVISION, STATUTES AND
REGULATION INVOLVED ...................... 2
STATEMENT OF THE CASE....................... +
i iveto yah ehkn cs ak ac xehasd.suedevcad 4
B. The Case Below - Administrative and Judicial
ED ais oc 0006468464 00s cA sus kn u'sec'e 5
REASONS FOR GRANTING THE PETITION ....... 11
I. This Court Should Grant The Petition Because
The Tenth Circuit’s Decision Erroneously Ren-
dered Conclusions of Law Which Directly Con-
flict With Conclusions of Law Correctly
Rendered in a Prior Decision by the Colorado
EE NE os ers ke Gwin dedi saseaeeseeesaaes 12
Il. The Conflicting Decisions Involve The Important
Issue Of Airport Owner/Operators’ Proprietary
Powers In The Management And Operation Of
Airports Within A National Aviation System.
Accordingly, A Standard Should Be Established
By This Court By Which Lower Courts May
Determine When A Matter Truly Impacts The
National Aviation System As Opposed To Being
A Matter Of Proprietary Power................ 16
ie SUG Cheb nae ewok ek 6is6s0sicceacnace 19
iv
TABLE OF CONTENTS - Continued
Page
APPENDIX A
Opinion, Arapahoe County Pub. Airport Auth. v.
FAA, 242 F.3d 1213 (10th Cir. 2001) ........... App. 1
APPENDIX B
Final Agency Decision and Order, Centennial
Express Airlines et al. v. Arapahoe County Pub.
Airport Auth., FAA Order No. 1999-1, 1999 FAA
Foe ee. ee SD . MPerrrrTerT rr Try App. 23
APPENDIX C
Order on Petition for Rehearing and Request for
Rehearing En Banc, Arapahoe County Pub. Air-
OO FD. BG. via cscawistanneeserecsrivnns App. 60
APPENDIX D
Opinion, Arapahoe County Pub. Airport Auth. v.
Centennial Express Airlines, Inc., 956 P.2d 587
SEN ciesd oe sbaeaeeen wes 600aa¥eeeneee App. 62
V
TABLE OF AUTHORITIES
Page
CAsES
American Airlines, Inc. v. Department of Transp., 202
F.3d 788 (5th Cir. 2000), cert. denied, 530 U.S.
Eee CEUD sso ckcnnnchiracexddacacsaeeesi ce caieee 16
Arapahoe County Pub. Airport Auth. v. Centennial
Express Airlines, Inc., 956 P.2d 587 (Colo.
| Peer [atabeie dese eaeeees ee eeeen’ passim
Arapahoe County Pub. Airport Auth. v. FAA, 242
Pate SERS Cle Cie Basa cence passim
City of Burbank v. Lockheed Air Terminal, Inc., 411
ate GOR CRIPOy ss oe ccdeavigasorcaskele eee 16, 18
Northwest Airlines, Inc. v. Minnesota, 322 U.S. 292
CED) suds ctennsacckuedseg tata eee 17
Western Air Lines, Inc. v. Port Auth., 658 F. Supp.
952 (S.D. N.Y. 1986), aff'd, 817 F.2d 222 (2d Cir.
1987), cert. denied, 485 U.S. 1006 (1988)............ 16
CONSTITUTION
U.S. Comet. Anteie Vi, Ob: 2 32 oteedeses ease 2
STATUTES
ae UDR. | TE) bbccinaeedsessniginsasaneeoeel 2
49 USC. § 41713(b)1), (3)... een e keen ves 2, 16, 17, 18
OP WBK.. § GRRIe os hes 4 bickctencs eee 2
49 US.C. § 47102(18), (7), and (11) .......22..000e00- 8
OUSl. OO... 3
vi
TABLE OF AUTHORITIES - Continued
Page
DD UBL. § GTM occ cccccccessccvcescssccecsecss 14
Colo. Rev. Stat. § 41-3-106(1)(h)............... 3, 14, 17
REGULATIONS
B6 CAR FOCE OD onccndccctnccdcccacteccesnseseaian 11
14 C.F.R. Part 152, § 152 Appx. D, ¢ 18........... 3, 17
LeGIsLATIVE MATERIALS
Airline Deregulation Act of 1978, Pub. L. No.
GS-GU6, SB Teak. TIED CUSED occ cccscescccvvacevenen 16
BD0 CURLS. Hi DD CENCE ec cv cecccctntvanansend 17
ADMINISTRATIVE MATERIALS
FAA/OST Task Force Study, Airport Business Prac-
tices and Their Impact on Airline Competition, Ch.
2 GR, BOGE ccvcccsenctuccsdeusseessesseunteesaas 15
Policy Regarding Airport Rates and Charges, 61
Ped. Ram, FLIES GEOGes occ vsavectvscaccdsskacaeure 17
OTHER AUTHORITY
P.O. Ntiesch, Rights as a Tool for Airport Manage-
ment, The Air & Space Lawyer, Vol. 15, No. 4
(ABA, Speen, TOBE). cc ccccccccescccccccesncscveses 13
PETITION FOR WRIT OF CERTIORARI
The Arapahoe County Public Airport Authority
(“Airport Authority”) respectfully petitions for a writ of
certiorari to review the opinion of the United States Court
of Appeals for the Tenth Circuit (“Tenth Circuit”), entered
in this proceeding on March 9, 2001, in order to resolve a
direct conflict between the Tenth Circuit and a decision
by the Colorado Supreme Court on the important federal
question presented herein.
OPINIONS BELOW
The opinion of the Tenth Circuit which gives rise to
this petition is reported at 242 F.3d 1213 and is reprinted
in the Appendix at App. 1 to App. 22. The Order of the
Tenth Circuit, dated May 7, 2001, which denied the Air-
port Authority’s Petition for Rehearing and Request for
Rehearing En Banc, is reprinted in the Appendix at App.
60 to App. 61. The Final Agency Decision and Order
(“Final Agency Order”), which the Tenth Circuit affirmed
by its opinion, is publicly available at 1999 FAA LEXIS
805 and is reprinted in the Appendix at App. 23 to App.
59. The decision of the Colorado Supreme Court, with
which the opinion of the Tenth Circuit directly conflicts
on the important federal question presented herein, is
reported at 956 P.2d 587 and is reprinted in the Appendix
at App. 62 to App. 112.
JURISDICTION
The opinion of the Tenth Circuit is dated March 9,
2001. The Tenth Circuit Order denying the Airport
Authority’s Petition for Rehearing and Request for
Rehearing En Banc is dated May 7, 2001. The jurisdiction
of this Court is invoked under 28 U.S.C. § 1254(1) and
pursuant to 49 U.S.C. § 46110(e).
¢
CONSTITUTIONAL PROVISION, STATUTES
AND REGULATION INVOLVED
U.S. Const. Article VI, cl. 2 provides:
The Constitution, and Laws of the United States
which shall be made in Pursuance thereof; and
all Treaties made, or which shall be made, under
the Authority of the United States, shall be the
supreme Law of the Land; and the Judges in
every State shall be bound thereby, any Thing in
the Constitution or Laws of any State to the
Contrary notwithstanding.
49 U.S.C. § 41713(b)(1), (3) provides:
(1) Except as provided in this subsection, a
State, political subdivision of a State, or political
authority of at least 2 States may not enact or
enforce a law, regulation, or other provision
having the force and effect of law related to a
price, route, or service of an air carrier that may
provide air transportation under this subpart.
(3) This subsection does not limit a State,
political subdivision of a State, or political
authority of at least 2 States that owns or oper-
ates an airport served by an air carrier holding a
certificate issued by the Secretary of Transporta-
tion from carrying out its proprietary powers
and rights.
49 U.S.C. § 47107(a)(1) provides:
(1) the airport will be available for public use
on reasonable conditions and without unjust
discrimination;
14 C.FR. Part 152, § 152 Appx. D, ¥ 18 provides:
The Sponsor will operate the Airport as
such for the use and benefit of the public. In
furtherance of this covenant (but without limit-
ing its general applicability and effect), the
Sponsor specifically agrees that it will keep the
Airport open to all types, kinds, and classes of
aeronautical use on fair and reasonable terms
without discrimination between such types,
kinds, and classes. Provided, that the sponsor
may establish such fair, equal, and not unjustly
discriminatory conditions to be met by all users
of the airport as may be necessary for the safe
and efficient operation of the Airport; And Pro-
vided Further, That the Sponsor may prohibit or
limit any given type, kind, or class of aeronauti-
cal use of the Airport if such action is necessary
for the safe operation of the Airport or neces-
sary to serve the civil aviation needs of the
public.
Colo. Rev. Stat. § 41-3-106(1)(h) provides:
(h) To regulate, when acting singly, or by
agreement, when acting jointly with any other
municipality or county, the receiving, deposit,
and removal and the embarkation of passengers
or property to or from the airport; to regulate or
prohibit any airport hazard; to exact and require
charges, fees, and rentals, together with a lien to
enforce the payment; to lease or assign for oper-
ation such space or area, appurtenances,
appliances, or other conveniences necessary or
useful in connection therewith; to own and
operate aircraft; to employ pilots; to provide
rules and regulations governing the use of such
airport and facilities and the use of other prop-
erty and means of transportation within or over
said airport, landing field, and navigation facili-
ties; to perform any duties, necessary or consis-
tent with the regulation of air traffic; to enter
into contracts or otherwise cooperate with the
United States, the state, or other public or pri-
vate agencies; and to exercise such powers as
may be required or consistent with the promo-
tion of aeronautics and the furtherance of com-
merce and navigation by air;
*
STATEMENT OF THE CASE
A. The Issue
The issue addressed by the Colorado Supreme Court
and Tenth Circuit, on the same basic facts and with
diametrically opposed conclusions, is whether an airport
proprietor may ban an aeronautical use, which had never
operated at the airport, under the Supremacy Clause of
the United States Constitution, the proprietary powers
exception set forth in federal statute, and the specific
language of federal regulation, as, determined by the
airport proprietor to be, necessary for the safe operation
of the airport or to serve the civil aviation needs of the
public.
This Court has never ruled on the nature and extent
of an airport owner/operator’s proprietary powers. By
this Petition, the Airport Authority is requesting this
Court to establish a standard by which lower courts may
determine when a matter truly affects the national avia-
tion system as opposed to when, as here, a matter is truly
local and proprietary. In essence, does the matter affect
air space or does it affect ground space?
B. The Case Below - Administrative and Judicial
Proceedings
The Airport Authority is the owner/operator of Cen-
tennial Airport (“Centennial”). Centennial was created
amid controversy and opened as the Arapahoe County
Airport in 1967. To assuage the concerns of the citizenry,
the Arapahoe County Commissioners promised that Cen-
tennial would be a general aviation reliever airport for
Stapleton International Airport and would not permit
scheduled passenger service. As such, Centennial was
designed and built with Federal Aviation Administration
(“FAA”) grants as a general aviation reliever airport.
Pursuant to national, regional and local planning, Cen-
tennial has always operated as a general aviation reliever
airport. See Arapahoe County Pub. Airport Auth. v. Centen-
nial Express Airlines, Inc., 956 P.2d 587, 589-590 (Colo.
1998). (App. at 63-67).
The Arapahoe County Commissioners never allowed
scheduled passenger service at the airport. In 1975, the
Arapahoe County Commissioners created the Airport
Authority which, upon creation, became a political subdi-
vision of the State of Colorado. The Airport Authority
Commissioners also never allowed scheduled passenger
service at Centennial. See id.
In the mid to late 1980s a push was made by certain
individuals to conduct scheduled passenger service oper-
ations at Centennial.! In April 1993, the Airport Author-
ity, in response to the increasing pressure and in
reiteration of its twenty-six year position, adopted a mor-
atorium on the review or consideration of applications to
conduct scheduled passenger service. This moratorium
was quickly followed on May 7, 1993 by a formal applica-
tion from Centennial Express Airlines, Inc. (the “Airline”)
to conduct scheduled passenger service at Centennial.
Resulting from the Airline’s application were three FAA
administrative proceedings, one United States Depart-
ment of Transportation (“DOT”) letter, and the directly
conflicting Colorado Supreme Court and Tenth Circuit
opinions. See id. at 589-591. (App. at 63-70); see Arapahoe
County Pub. Airport Auth. v. FAA, 242 F.3d 1213, 1216-1217
(10th Cir. 2001). (App. at 2-6).
Cumulatively, derived from the foregoing proceed-
ings, eleven Airport Authority principles have been
enunciated in support of the ban on scheduled passenger
service:
_ 1 See Arapahoe County Pub. Airport Auth. v. Centennial
Express Airlines, Inc., 956 P.2d 587, 590 (Colo. 1998). (App. at 66).
(“Despite Centennial’s lack of facilities, private efforts have
been made to bring scheduled passenger service to the airport.
In response, the Authority has increased efforts to prohibit
scheduled passenger service.”)
2 To the extent these principles have been referenced in the
Colorado Supreme Court or Tenth Circuit opinions, citations are
provided.
1. At the inception of Centennial, the Arapahoe
County Commissioners promised the citizens that Cen-
tennial would be a general aviation reliever airport only
and would not permit scheduled passenger service. See
Arapahoe County Pub. Airport Auth., 956 P.2d at 589-590,
595. (App. at 63-67, 80-81).
2. The Commissioners, whether County or Airport
Authority, have never permitted scheduled passenger
service. Id.
3. If an airline is allowed to operate scheduled pas-
senger service at Centennial, all applicants who wish to
provide the same service must be allowed to do so. Id. at
596. (App. at 83).
4. FAA policy favors commercial service over gen-
eral aviation and, as such, if there is a capacity constraint,
scheduled passenger service will have primacy over gen-
eral aviation and the Airport Authority could be required
to exclude or limit general aviation to accommodate
scheduled passenger service, which would be contrary to
published national, regional and local planning which
designate Centennial as a general aviation reliever airport
for Denver International Airport (“DIA”). A general avia-
tion reliever airport, such as Centennial, performs a vital
function in the national aviation system by removing the
congestion of general aviation aircraft from scheduled
passenger service airports. See id. at 589-590, 594 n.9,
596-597, 606. (App. at 63-67, 77-78, 83-84, 107-108).
5. The Airport Authority’s Minimum Standards for
Commercial Aeronautical Activity (“Minimum Stan-
dards”) define Ceritennial’s “Airport Purpose” as “any
Authority action, undertaking or development that is
consistent in maintaining the non-certificated status of
the Airport and in preserving the Airport funding cate-
gory as a ‘Reliever Airport’ serving general aviation
users. Under no circumstance shall the Airport Purpose
include scheduled passenger services.” See id. at 590.
(App. at 66-67).
6. Scheduled passenger service operations could
transform Centennial from a “Reliever Airport” to a
“Commercial Service Airport” and then to a “Primary
Airport”. If Centennial becomes a “Primary Airport” it
would have to compete with DIA for federal grant agree-
ments.? See id.
7. The Code of Federal Regulations and the FAA’s
grant agreements state that the Airport Authority “may
prohibit or limit any given type, kind or class of aero-
nautical use of the airport if such action is necessary for
the safe operation of the airport or necessary to serve the
civil aviation needs of the public.” See id. at 589; (App. at
64); Arapahoe County Pub. Airport. Auth., 242 F.3d at 1222;
(App. at 18); 14 C.FR. Part 152, § 152 Appx. D, { 18.
8. The Colorado Supreme Court has determined
that the Airport Authority’s ban on scheduled passenger
service falls squarely within its proprietary powers and
the ban on scheduled passenger service is necessary for
the safe operation of the airport and serves the civil
3 Definitions of “reliever airport”, “commercial service
airport” and “primary airport” are set forth in 49 U.S.C.
§ 47102(18), (7), and (11) respectively. The lack of comparability
of facilities between Centennial and DIA supports how
incongruous it would be to have Centennial and DIA in the
same funding category.
aviation needs of the public. Arapahoe County Pub. Airport
Auth., 956 P.2d at 595-597. (App. at 79-84).
9. Centennial is approaching its capacity. As such,
current FAA policy would allow a general aviation
reliever airport such as Centennial to ban scheduled pas-
senger service if Centennial was in a multi-airport system
under one owner. Local, regional and national planning
has designated Centennial as a general aviation reliever
airport in a multi-airport system. Such planning is consis-
tent with and the functional equivalent of FAA’s policy
that allows a multi-airport proprietor to ban scheduled
passenger service at a general aviation reliever airport in
order to maintain the attractiveness of the general avia-
tion reliever airport to general aviation. See id. at 591, 597.
(App. at 68, 83-84).
10. Airport planners and architects designed Cen-
tennial to accommodate general aviation and not sched-
uled passenger service. Centennial’s design does not
include a terminal, a baggage system, adequate parking
and adequate security necessary to accommodate sched-
uled passenger service. See id. at 590, 596. (App. at 66, 83).
11. The National Transportation Safety Board
(“NTSB”) recommends that scheduled passenger service
be only at certificated airports with on-the-airport fire
and rescue services. Centennial is not certificated. Cen-
tennial has to rely on off-the-airport and non-exclusive
fire protection services. In the event of an accident the
fire department cannot meet a three-minute fire response
time at Centennial. The significance of the three-minute
fire response time is that if a fire department does not
have the fire controlled and mostly extinguished within
three minutes, the chance of having survivable victims is
10
zero. See Arapahoe County Pub. Airport Auth., 242 F.3d at
1223 n.10. (App. at 20).
As noted, the Colorado Supreme Court ruled in Arap-
ahoe County Public Airport Authority v. Centennial Express
Airlines, Inc., 956 P.2d 587 (Colo. 1998) that the Airport
Authority’s Minimum Standards and ban on scheduled
passenger service are not preempted by federal law and
do not violate the grant assurances given to the federal
government. Further, the Colorado Supreme Court held
that the ban on scheduled passenger service is necessary
for the safe operation of Centennial and serves the civil
aviation needs of the public. Id. at 593-597. (App. at
74-85). On “the same basic facts,” the Tenth Circuit
upheld the FAA’s termination of the Airport Authority’s
eligibility for federal grant agreements, concluding, in
part, “the Authority’s ban on scheduled passenger ser-
vice is preempted by statute and the Supremacy
Clause;....” Arapahoe County Pub. Airport Auth. v. FAA,
242 F.3d 1213, 1217, 1224 (10th Cir. 2001). (App. at 5, 22).
The Tenth Circuit initially held that “the strong pol-
icy of federal supremacy in the field of aviation prevails
over full faith and credit principles in this case. The
Colorado Supreme Court’s decision in Arapahoe County
Public Airport Authority v. Centennial Express Airlines
therefore has no bearing on the FAA decision before us.”
Id. at 1221. (App. at 15). In initially dismissing the Colo-
rado Supreme Court opinion, the Tenth Circuit stated (1)
that the Colorado Supreme Court addressed issues of
preemption and grant assurances in a “narrow context”,
(2) the Colorado Supreme Court’s grant agreement con-
clusion lacks the “depth and breadth” of the FAA anal-
ysis, and (3) that it was a plurality opinion. Id. at 1219.
(App. at 10-11). The Tenth Circuit then proceeded to
11
determine that (1) the ban on scheduled passenger ser-
vice is preempted and (2) the record supports the FAA’s
findings that the Airport Authority acted unreasonably in
exercising its proprietary powers.‘ Id. at 1221-1224. (App.
at 15-21).
REASONS FOR GRANTING THE PETITION
The Airport Authority respectfully requests this
Court to grant its Petition for two reasons:
1. First, on the same basic facts, the Tenth Circuit
erroneously rendered conclusions of law on the Suprem-
acy Clause and proprietary powers exception that were
diametrically opposed to the correct conclusions of law
rendered by the Colorado Supreme Court. The Tenth
Circuit opinion ignored the thoughtfully considered pro-
prietary powers and grant agreement analysis of the Col-
orado Supreme Court. This analysis focused on the power
of an airport to control and determine its size and facili-
ties. The analysis also ascribed to the importance of the
historical and the national, regional, and local planning
pertaining to Centennial.
* The FAA’s statement of facts and, to the extent addressed,
the FAA’s positions on the Airport Authority’s positions are set
forth in the Final Agency Order at App. 24 to App. 29 and App.
40 to App. 57. The FAA’s defense of its multiple roles in the 14
C.F.R. Part 16 fact finding and decision making process is set
forth in App. 39 to App. 40.
12
2. Second, these conflicting decisions involve the
important issue of an airport owner/operators’ propri-
etary powers in the management and operation of air-
ports within a national aviation system. Accordingly, a
standard should be established by this Court by which
lower courts may determine when a matter truly impacts
the national aviation system as opposed to being a matter
of local, proprietary power. The Airport Authority sub-
mits that the standard should be based, consistent with
the Colorado Supreme Court decision, on whether the
exercise of proprietary power pertains to the air space,
i.e., operation of aircraft, or whether it pertains to ground
space, i.e., facilities and planning.
I. This Court Should Grant The Petition Because The
Tenth Circuit’s Decision Erroneously Rendered Con-
clusions of Law Which Directly Conflict With Con-
clusions of Law Correctly Rendered in a Prior
Decision by the Colorado Supreme Court
The Tenth Circuit acknowledged that “the same basic
facts” were before the Colorado Supreme Court and the
Tenth Circuit. See Arapahoe County Pub. Airport Auth., 242
F.3d at 1217. (App. at 5). Yet on these “same basic facts”,
the Colorado Supreme Court and Tenth Circuit reached
directly conflicting conclusions pertaining to the Airport
Authority’s ban on scheduled passenger service.
The Colorado Supreme Court concluded that the ban
on scheduled passenger service was not preempted by
federal law but is a valid exercise of proprietary powers.
Arapahoe County Pub. Airport Auth., 956 P.2d at 593-596.
(App. at 74-81). The Colorado Supreme Court specifically
recognized:
13
While regulations concerning aircraft noise and
ground congestion restrict the manner in which
airport users conduct their operations, a ban on
scheduled service seeks to accomplish a more
fundamental goal in setting the boundaries of
permissible operations at the airport. The power
to control an airport's size exists at the core of the
proprietor’s function and is especially strong where,
as here, the prohibited use has never been allowed, or
even contemplated. (citation omitted) (emphasis
added).
Id. at 595. (App. at 80-81). The Colorado Supreme Court
correctly perceived the issue as one of the Airport
Authority maintaining the status quo of its facilities, as
contrasted to being forced to expand its facilities. See also
id. at 596 n.12. (App. at 82). (“Further, City of Dallas
concerned a ban enacted after that airport proprietor had
previously allowed scheduled passenger operations at
the airport. Therefore, facilities and procedures were
already in place to accommodate scheduled passenger
service. Such is not the case at Centennial where sched-
uled passenger service has never been permitted.”)
One commentator has noted:
These types of facility decisions have tradi-
tionally been left up to the airport proprietor.
Lately, however, DOT has begun to make the
argument that airports may be obligated to
accommodate new service. FAA/OST Task Force
Study, Airport Business Practices and Their
Impact on Airline Competition, ch. 2 (Oct. 1999).
P.O. Ntiesch, Rights as a Tool for Airport Management, The
Air & Space Lawyer, Vol. 15, No. 4 at 10 n.29 (ABA,
14
Spring 2001). This lack of facilities, which, as set forth
above, is only one of the reasons why the Airport Author-
ity bans scheduled passenger service, clarifies the dispute
over the national versus local, proprietary power.°
The Airport Authority’s position is that because it
does not have the facilities for scheduled passenger ser-
vice, it may ban scheduled passenger service as necessary
for the safe operation of the airport. Further, and most
importantly, it cannot be required to build facilities to
accommodate scheduled passenger service. Rather, it may
continue to operate as it was designed and built — as a
general aviation reliever airport.
The FAA’s present viewpoint requires the Airport
Authority to expand and build the scheduled passenger
service facilities. As stated in the FAA/OST study cited
by Mr. Niiesch:
FAA has interpreted the reasonable access pro-
vision as requiring access for new entrants. . . .
FAA determined that some arrangements for
accommodation must be made if reasonably
possible, and that a carrier may not be denied access
to an airport solely based on the non-availability of
currently existing facilities. In some cases, the air-
port operator may provide temporary facilities,
such as a mobile ticket office and gate facilities,
to relieve the situation. Otherwise, FAA and the
5 The Colorado Supreme Court also recognized that the
Airport Authority’s actions were pursuant to state law (citing
Colo. Rev. Stat. § 41-3-106(1)(h)), national, regional, and local
planning, non-discriminating and addressed exclusive rights
(citing 49 U.S.C. § 47107(a)(4)). See Arapahoe County Pub. Airport
Auth., 956 P.2d at 594-597. (App. at 77-84).
15
airport operator together can develop a solution
to the problem. . . . (emphasis added)
FAA/OST Task Force Study, Airport Business Practices and
Their Impact on Airline Competition, Ch. 2 at 16 (Oct. 1999).
The Tenth Circuit is correct that “the Authority relies
largely on the Colorado Supreme Court's conclusion the
ban on scheduled passenger service was, indeed, neces-
sary for the safe operation of Centennial Airport and to
serve the public’s civil aviation needs.” Arapahoe County
Pub. Airport Auth., 242 F.3d at 1221. (App. at 15). The
Tenth Circuit is also correct that the Airport Authority
maintains that “the scheduled passenger service ban is
per se an exercise of its propriety [sic] power, ...” Id. at
1222. (App. at 18).
The Colorado Supreme Court correctly realized that
the Airport Authority was not adversely impacting the
operation of aircraft, which is the traditional sphere of
the FAA, but rather acting as an owner of an airport
without the facilities to support scheduled passenger ser-
vice, and which owner did not wish to expand its facili-
ties. The Airport Authority asserts that it has the absolute
right to decide not to build scheduled passenger service
facilities. One effect of the Tenth Circuit decision is to
sanction the FAA’s withholding of funds unless and until
the Airport Authority agrees to expand its facilities to
accommodate scheduled passenger service.
However, more is at stake here than whether or not
the Colorado Supreme Court or the Tenth Circuit is right.
For these conflicting decisions may have been avoided if
a standard had been established for determining the
nature and extent of an airport owner’s proprietary
16
powers. However, such a standard has never been estab-
lished. See Arapahoe County Pub. Airport Auth., 242 F.3d at
1222; (App. at 18); American Airlines, Inc. v. Department of
Transp., 202 F.3d 788, 806 (5th Cir. 2000), cert. denied, 530
U.S. 1284 (2000); Western Air Lines, Inc. v. Port Auth., 658
F. Supp. 952, 956 (S.D. N.Y. 1986), aff'd, 817 F.2d 222 (2d
Cir. 1987), cert. denied, 485 U.S. 1006 (1988); Arapahoe
County Pub. Airport Auth., 956 P.2d at 595 (App. at 80).
(“There are no cases that address the specific question
posed by the present case.”).
II. The Conflicting Decisions Involve The Important
Issue Of Airport Owner/Operators’ Proprietary
Powers In The Management And Operation Of Air-
ports Within A National Aviation System. Accord-
ingly, A Standard Should Be Established By This
Court By Which Lower Courts May Determine
When A Matter Truly Impacts The National Avia-
tion System As Opposed To Being A Matter Of
Proprietary Power
Prior to the enactment of the Airline Deregulation
Act of 1978, Pub. L. No. 95-504, 92 Stat. 1705 (1978)
(“ADA”), this Court noted, but did not determine, “what
limits, if any, apply to a municipality as a proprietor.”
City of Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624,
635-636 n.14 (1973). When the ADA was enacted the
proprietary powers of airport owner/operators was
expressly reserved. See 92 Stat. at 1708, as now codified at
49 U.S.C. § 41713(b)(3). In the legislative history for the
ADA, Congressman Anderson stated: “It was not the
intent of the House conferees to limit in any way the
normal exercise of a proprietor’s powers to determine the
17
level and nature of service to be provided at airports,
subject to constitutional and statutory limitations.” 124
CONG. REC. 38,526 (1978). This Court has not since
revisited the proprietary powers issue.
The Airport Authority asserts, pursuant to 49 U.S.C.
§ 41713(b)(3), 14 C.FR. Part 152, § Appx. D { 18, and
Colo. Rev. Stat. § 41-3-106(1)(h), that it has the propri-
etary power to ban the aeronautical use of scheduled
passenger service. The FAA has defined “the aeronautical
use of an airport to be any activity that involves, makes
possible, is required for the safety of, or is otherwise
directly related to, the operation of aircraft. Aeronautical
use includes services provided by air carriers related
directly and substantially to the movement of passengers,
baggage, mail and cargo on the airport.” Policy Regard-
ing Airport Rates and Charges, 61 Fed. Reg. 31,994, 32,017
(1996). The emphasis is on the operation of aircraft. The
Airport Authority submits therefore that a bright line
distinction is that the FAA rules supreme in the operation
of aircraft. Cf. Northwest Airlines, Inc. v. Minnesota, 322
U.S. 292, 303 (1944) (Jackson, J., concurring) (“Federal
control is intensive and exclusive. Planes do not wander
about the sky like vagrant clouds. They move only by
federal permission, subject to federal inspection, in the
hands of federally certified personnel and under an intri-
cate system of federal commands. The moment a ship
taxis onto a runway it is caught up in an elaborate and
detailed system of controls.”). The airport proprietor,
however, acting as owner and landlord of the ground
space, must determine whether it has the facilities avail-
able to accommodate an aeronautical use, e.g., is there a
terminal, baggage facilities, security to protect users, and
18
parking? In essence, if a proprietor does not have the
facilities to accommodate an aeronautical use, it may
choose whether to build the facilities or ban the use. Cf.
City of Burbank, 411 U.S. at 644 (“Furthermore, while
Congress clearly intended to pre-empt the States from
regulating aircraft in flight, the author of the bill, Senator
Maroney, specifically stated that FAA would not have
control ‘over the ground space of’ airports.” (footnote
omitted) (Rehnquist, J. dissenting).
The actions of the FAA with respect to the Airport
Authority, the comment by Mr. Ntiesch previously cited,
and the FAA/OST study previously cited all support that
the FAA seeks to expand its power to include dictating
the construction and expansion of facilities at airports. If
such expansion of power is sanctioned, as it has been by
the Tenth Circuit, then what is left of proprietary powers?
The general preemption rule of 49 U.S.C. § 41713(b)(1)
will have swallowed the proprietary powers’ provision of
49 U.S.C. § 41713(b)(3) and rendered it a nullity, contrary
to the intent of Congress.
The Airport Authority respectfully submits a propri-
etor cannot be forced to expand its facilities to accommo-
date an aeronautical use. Under the standard that the
airport proprietor, and not the FAA, controls the ground
space owned by the proprietor, the Colorado Supreme
Court correctly upheld the ban on scheduled passenger
service as a valid exercise of proprietary power and the
Tenth Circuit erred as a matter of law in concluding the
ban was preempted because the Airport Authority did
not reasonably exercise its nie powers.
19
The reasons asserted by the Airport Authority and
adopted by the Colorado Supreme Court - design and
lack of facilities, as well as national, regional and local
planning, are within the traditional powers of the owner/
landlord. The exercise of these powers preserved a now
34 year old status quo of the ground space and did not
impact the flight of aircraft, the path of aircraft, the
altitude of aircraft, the qualifications of the pilots or the
airworthiness of the aircraft. All of those matters are
clearly within the province of the FAA.
Accordingly, the Airport Authority is petitioning this
Court to establish a standard for proprietary powers -
does the matter at issue pertain to ground space or does it
pertain to air space? If it pertains to ground space, it is
within an airport owner’s proprietary powers, subject to
court review.
CONCLUSION
The petition for writ of certiorari should be granted.
Dated August 2, 2001.
Respectfully submitted,
Breca & Winters P.C.
RONALD S. LosER
Brian A. Macoon *
1700 Lincoln Street, Suite 2222
Denver, CO 80203
(303) 866-9400
* Counsel of Record
titi
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= - : = sth + ae Se mee — 7
App. 1
PUBLISH
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
ARAPAHOE COUNTY PUBLIC
AIRPORT AUTHORITY, a
political subdivision of the
State of Colorado, No. 99-9508
(Filed
Mar. 9, 2001)
Petitioner,
V.
FEDERAL AVIATION
ADMINISTRATION,
Respondent,
CITY OF GREENWOOD
VILLAGE,
Intervenor.
REGIONAL AIRLINE
ASSOCIATION,
Amicus Curiae.
tl i i i dd
Appeal from the Federal Aviation Administration
Brian A. Magoon (Ronald S. Loser with him on the briefs)
of Brega & Winters, P.C., Denver, Colorado, for Petitioner.
Christine N. Kohl (David W. Ogden, Acting Assistant
Attorney General, and Michael Jay Singer, Department of
Justice, with her on the brief), Department of Justice,
Washington, D.C., for Respondent. '
App. 2
Constance E: Brooks (Michael B. Marinovich and Chris-
tine A. Longhitano with her on the briefs) of C.E. Brooks
& Associates, P.C., Denver, Colorado, for Intervenor.
Before BRORBY and McWILLIAMS, Circuit Judges, and
ELLISON,” District Judge.
BRORBY, Circuit Judge.
This case involves the Federal Aviation Administra-
tion’s (FAA) decision to suspend petitioner’s eligibility
for discretionary federal grants, based on claimed viola-
tions of federal statutes and existing grant provisions.
Petitioner Arapahoe County Public Airport Authority
(Authority) and Intervenor City of Greenwood Village
(City) urge us to set aside the decision. for various rea-
sons, not the least of which is the decision is incompatible
with an earlier opinion issued by the Colorado Supreme
Court. We exercise jurisdiction pursuant to 49 U.S.C.
§§ 46110 and 47106(d)(3). For the reasons set forth below,
we deny the Petition for Review and affirm the FAA’s
order.
* The Honorable James O. Ellison, Senior United States District
Judge for the Northern District of Oklahoma, sitting by
designation.
App. 3
BACKGROUND!
The Authority owns and operates Centennial Air-
port, which is located just south of Denver, Colorado.
Operations at the airport historically have consisted of
“unscheduled” commercial passenger and cargo service.
In the course of operating the airport, the Authority has
accepted millions of dollars in discretionary grants from
the FAA. As part of the grant process, the Authority
made assurances the airport would be “available . . . for
public use on reasonable terms and without unjust dis-
crimination, to any person, firm, or corporation to con-
duct or to engage in any aeronautical activity for
furnishing services to the public at the airport.” However,
within the same grant assurance, the FAA also recognized
the Authority “may prohibit or limit any given type, kind
or class of aeronautical use . . . if such action is necessary
for the safe operation of the airport or necessary to serve
the civil aviation needs of the public.”
Over the course of several years, Centennial Express
Airlines (Centennial Express) divulged an interest in pro-
viding scheduled passenger service at Centennial Air-
port, culminating in an official application in May 1993.
Centennial Express submitted its application despite the
Authority’s actions one month earlier placing a mor-
atorium on the consideration of applications for sched-
uled passenger service. The moratorium was designed to
provide the Authority time to determine whether it could
' The Authority states in its brief the only issues on appeal
are legal in nature. Therefore, the facts presented in the
background section of this opinion draw extensively from the
FAA’s decision.
App. 4
legally prohibit scheduled service. While the Authority
asked for guidance from the FAA on the question, it
ultimately decided to completely ban all scheduled air
carrier service without waiting to hear from the FAA.? In
contravention of the Authority’s ban, Centennial Express
initiated scheduled passenger service between Centennial
Airport and Dalhart, Texas on December 20, 1994. The
Authority immediately sought and obtained a temporary
injunction in state district court to prevent Centennial
Express from offering scheduled passenger service.
The state district court eventually granted the
Authority a permanent injunction. Centennial Express
successfully appealed the injunction to the Colorado
Court of Appeals, but a plurality of the Colorado
Supreme Court reversed the state court of appeals and
reinstated the permanent injunction. See Arapahoe County
Pub. Airport Auth. v. Centennial Express Airlines, Inc., 956
P.2d 587 (Colo. 1998) (en banc). The Colorado Supreme
Court issued its opinion despite concurrent complaints
on file with the FAA, and in so doing decided federal law
did not preempt the Authority’s ban on scheduled pas-
senger service and the ban did not violate the terms of
2 The Authority wrote the FAA in July 1993, and adopted
the ban in September 1994. The FAA responded in December
1994. The FAA response was not favorable to the ban, stating:
“In addressing similar cases in the past, [the] FAA has found it
arbitrary to exclude any particular class of service due to factors
that are not reasonably related to the impacts of that service.”
The FAA also found the Authority submitted insufficient
information “to demonstrate that a restriction of any particular
category of operation could be adequately supported,” and
concluded “existing policy on airport access must be complied
with.”
Ste a ee
App. 5
the non-discrimination grant assurances. See id. at 592-97.
The FAA was not a party to this state litigation.
As alluded to in the previous paragraph, the agency
decision-making process under review here got its start at
the same time as the state litigation, and involves the
same basic facts. Thomas Kehmeier, a Centennial Express
stockholder, filed the first complaint with the FAA in
August 1994, claiming the Authority’s ban violated fed-
eral law and the grant assurances. Centennial Express
filed its own complaint in January 1995. As the Colorado
Supreme Court noted, the FAA had yet to rule on either
complaint in 1998 when the court issued its opinion.
Arapahoe County Pub. Airport Auth., 956 P.2d at 592. These
initial complaints were filed pursuant to 14 C.F.R. Part 13.
New rules, found at 14 C.F.R. Part 16, and entitled “Rules
of Practice for Federally-Assisted Airport Enforcement
7
Proceedings,” went into effect December 16, 1996. Cen-
tennial Express filed a second complaint under the new
part 16 rules on February 23, 1998, just two months prior
to the Colorado Supreme Court’s decision. Centennial
Express filed the second complaint even though the com-
pany had voluntarily surrendered its FAA operating cer-
tificate in January 1996.
After consolidating the three complaints, and despite
the then-existing Colorado Supreme Court decision to
the contrary, FAA’s Director of the Office of Airport
Safety and Standards issued an initial determination on
August 21, 1998, concluding the ban violated the grant
assurances and federal law. The Authority requested a
App. 6
hearing,? which was held over two days in November
1998, and resulted in an affirmance of the director’s ini-
tial decision. The Authority and the City subsequently
appealed the hearing officer’s decision to the FAA Asso-
ciate Administrator for Airports, who issued the FAA’s
Final Agency Decision and Order affirming the previous
decisions. The Authority then filed the current petition
for review, and the City filed a Notice of Intervention
pursuant to 10th Circuit Rule 15.2(A).4
3 The hearing officer granted the City’s motion to
intervene; therefore, the City alsa.participated in the hearing.
4 The FAA argues the City is without statutory authority to
intervene in this review. We assume for purposes of this
opinion, but do not decide, that the City’s intervention is
proper. However, as an intervening party, the City may join
issue only on matters brought before the court by the Authority
as petitioner. See Illinois Bell Tel. Co. v. FCC, 911 F.2d 776, 786
(D.C. Cir. 1990) (citing Vinson v. Washington Gas Light Co., 321
U.S. 489, 498 (1944) (“an intervenor is admitted to the
proceeding as it stands, and in respect of the pending issues, but
is not permitted to enlarge those issues”)). We acknowledge this
limitation is a prudential determination as opposed to a
mandate of rule or statute, see Synovus Fin. Corp. v. Board of
Governors, 952 F.2d 426, 433-34 (D.C. Cir. 1991); nonetheless, we
agree it should be avoided only in “extraordinary cases.” New
York v. Reilly, 969 F.2d 1147, 1154 n.11 (D.C. Cir. 1992). This is not
an extraordinary case. The City’s issues, as a whole, are directed
toward the complainants’ standing, alleged due process
deficiencies, mootness and laches. Although the City summarily
characterizes these issues as related to “prudential
jurisdictional deficiencies,” after careful examination we
conclude the City’s issues are not “essential predicates” or
substantively connected to the issues the Authority presented in
its brief and Petition for Review. See United States Tel. Ass’n v.
FCC, 188 F.3d 521, 530-31 (D.C. Cir. 1999). Moreover, the City
presents no reason why it could not have petitioned for review
App. 7
STANDARD OF REVIEW
Our review of the FAA’s final decision and order
suspending the Authority’s eligibility for discretionary
federal grants is governed by the Administrative Pro-
cedure Act, 5 U.S.C. § 706.5 Within this context, we
review matters of law de novo. See Wyoming Farm Bureau
Fed'n v. Babbitt, 199 F.3d 1224, 1231 (10th Cir. 2000). How-
ever, the FAA’s findings of fact are conclusive if sup-
ported by substantial evidence. See id; 49 U.S.C.
§ 46110(c). The substantial-evidence standard does not
allow us to displace the FAA’s “choice between two fairly
conflicting views, even though the court would justifiably
have made a different choice had the matter been before
it de novo.” Babbitt, 199 F.3d at 1231 (quotation marks and
citation omitted); see also Trimmer v. United States Dep't of
Labor, 174 F.3d 1098, 1102 (10th Cir. 1999) (same).
ANALYSIS
The Authority contends the final FAA decision and
order should be set aside for the following three “errors
in its own right. See id. at 531. We therefore decline to consider
issues raised by the City but not the Authority.
> A reviewing court may set aside an agency determination
pursuant to 5 U.S.C. § 706(2) if it is (a) arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with law; (b)
contrary to constitutional right, power, privilege, or immunity;
(c) in excess of statutory jurisdiction, authority, or limitations,
or short of statutory right; (d) without observance of procedure
required by law; (e) unsupported by substantial evidence; or (f)
unwarranted by the facts to the extent they are subject to de
novo review. 5 U.S.C. § 706(2); see Lewis v. Babbitt, 998 F.2d 880,
881-82 (10th Cir. 1993).
App. 8
of law:” (1) the Colorado Supreme Court opinion reinstat-
ing the permanent injunction against Centennial Express
“is final, preclusive and dispositive;” (2) the Authority
and not the FAA determines whether scheduled pas-
senger service will be prohibited as necessary for the safe
operation of the airport and to serve the public’s civil
aviation needs; and (3) any allowable scheduled pas-
senger service must be limited to aircraft designed for
nine or fewer passenger seats.© We address each alleged
error in turn.
The Colorado Supreme Court Decision
The Authority argues, pursuant to the Full Faith and
Credit Act, 28 U.S.C. § 1738, that Arapahoe County Public
Airport Authority v. Centennial Express Airlines, 956 P.2d
587, “is final, preclusive and dispositive” of the issues
resolved in the FAA’s final order. The Full Faith and
Credit Act provides that the “judicial proceedings of any
court of any such State . . . shall have the same full faith
and credit in every court within the United States . . . as
they have by law or usage in the courts of such State
.. . from which they are taken.” 28 U.S.C. § 1738.
The FAA asserts 28 U.S.C. § 1738 is not technically
implicated here because it is an agency rather than a
6 The City, as Intervenor, joins in this third issue,
contending “FAA acted outside or abused its authority when it
prosecuted [the Authority] for banning scheduled passenger
service after Congress amended the federal aviation laws to
prohibit scheduled passenger service of more than 10 seats at
uncertified airports and to further provide that no airport can be
compelled to secure a certificate.” \
App. 9
court, see American Airlines, Inc. v. Dep't of Transp., 202
F.3d 788, 799 (5th Cir.), cert. denied, 120 S. Ct. 2762 (2000);
however, “[b]ecause most agency decisions may be
reviewed in federal courts, and those courts must follow
section 1738, [the FAA] therefore assume[s] that a com-
mon law rule of preclusion, like that embodied in section
1738, governs federal agency proceedings.” We agree
with the FAA and the Fifth Circuit that the preclusive
effect, if any, of the Colorado Supreme Court decision
derives from the common law doctrines of res judicata
and issue preclusion (collateral estoppel), not § 1738. See
id. at 799-800 & n.6. We further agree these common law
doctrines extending full faith and credit to state court
determinations are trumped by the Supremacy Clause if
the effect of the state court judgment or decree is to
restrain the exercise of the United States’ sovereign
power by imposing requirements that are contrary to
important and established federal policy. See id. at 800; see
also Midgett v. United States, 603 F.2d 835, 845 (Ct.Cl.
1979). Balancing, de novo,7 the common law justification
for full faith and credit with the competing policy sup-
porting the Supremacy Clause, we conclude the FAA is
not required to give preclusive effect to the Colorado
Supreme Court's decision in Arapahoe County Public Air-
port Authority v. Centennial Express Airlines.
7 See American Airlines, 202 F.3d at 799 (declining to defer to
agency’s ruling on full faith and credit issue); see also Adams
Fruit Co., Inc. v. Barrett, 494 U.S. 638, 650 (1990) (acknowledging
@ reviewing court need not afford deference to agency
interpretation of statute or law it is not charged with
administering); American Forest & Paper Ass'n v. EPA, 137 F.3d
291, 297 (5th Cir. 1998) (same).
App. 10
We begin our analysis on the full faith and credit side
of the equation. A close look at the Colorado Supreme
Court decision reveals the primary issue before that court
was the propriety of a permanent injunction enjoining
Centennial Express from conducting scheduled air carrier
service in and out of Centennial Airport. As such, the
Colorado Supreme Court focused from the outset on Cen-
tennial Express’ conduct in contravention of state regula-
tions. Arapahoe County Pub. Airport Auth., 956 P.2d at 593,
596 (stating that to defer to federal agency jurisdiction
would be to “allow future airport users to unilaterally
conduct and continue operations in violation of airport
rules so long as they implicate federal jurisdiction in
some way”). To the extent the Colorado Supreme Court
addressed federal preemption issues and the Authority’s
obligations under the federal grant assurances, it did so
in the narrow context of rejecting Centennial Express’
defenses. Id. at 593-97. Further examination reveals that
the court’s conclusion the Authority did not violate the
terms of the federal grant assurances lacks the depth and
breadth of analysis given to those same issues by the
Director of the FAA’s Office of Airport Safety and Stan-
dards, the Hearing Officer, and ultimately, the Final
Agency Decision and Order issued by the Associate
Administrator for Airports. Id. at 596-97.
The credit to be given to the state court opinion is
further influenced by the fact the Colorado Supreme
Court was seriously divided in this case, as evidenced by
its plurality opinion — three of seven justices participated
in the majority, one justice concurred, two justices dissen-
ted, and one justice abstained. Id. at 597. Of particular
note here, Justice Scott, while concurring in the result,
App. 11
considered it “inappropriate” to address preemption in
light of the fact the FAA had not yet acted under its
authority. Id. at 597-98 (Scott, J. concurring). He justified
the Colorado Supreme Court’s holding based on its inher-
ent authority to “issue an injunction to preserve the sta-
tus quo pending resolution of the dispute in an
appropriate forum.” Id. at 599. Given Justice Scott’s posi-
tion, and the additional fact the two dissenting justices
concluded that “in keeping with the doctrine of primary
jurisdiction” the FAA is the appropriate forum to deter-
mine issues pertaining to preemption and grant compli-
ance under federal statute, id. at 599 (Bender, J. and
Martinez, J. dissenting), only half the participating court
(three of six) ostensibly precluded the FAA from issuing a
contrary ruling.
Last, but certainly not least, the FAA was not a party
to, nor in privity with a party to, the state court proceed-
ings. The FAA’s interest in fulfilling its statutory respon-
sibility to ensure airport compliance with federal aviation
laws and grant assurances, and to protect the public
interest, is obviously independent of the interests of any
particular air carrier (e.g., Centennial). Mere knowledge
of the state court proceedings did not oblige the FAA to
participate in those proceedings. See Martin v. Wilks, 490
U.S. 755, 762-65 (1989). Without the FAA as a party, the
Colorado Supreme Court decision does not satisfy a fun-
damental requirement of issue preclusion under federal
or Colorado law. See, e.g., Baker v. General Motors Corp.,
522 U.S. 222, 237 n.11 (1998) (“In no event. . . can issue
preclusion be invoked against one who did not partici-
pate in the prior adjudication.”); Meredith v. Beech Aircraft
App. 12
Corp., 18 F.3d 890, 895 (10th Cir. 1994) (“collateral estop-
pel fails here simply because [plaintiff] was not a party to
the first suit”); O'Neill v. Simpson, 958 P.2d 1121, 1123 n.5
(Colo. 1998) (en banc) (“party against whom estoppel is
asserted [must have] been a party to or... in privity with
a party in the prior proceeding”). This, together with the
other circumstances discussed above, weighs heavily
against extending full faith and credit to Arapahoe County
Public Airport Authority v. Centennial Express Airlines.® See,
8 The Authority’s reliance on Town of Deerfield v. FCC, 992
F.2d 420 (2d Cir. 1993), is misplaced. In Deerfield, the FCC was
not a party in the state or federal court proceedings initiated by
Mr. Joseph Carino to challenge municipal zoning regulations
prohibiting the installation of a satellite dish in his backyard.
Because the FCC did not want to become “a national zoning
board,” it required complainants like Mr. Carino to pursue other
legal remedies before filing administrative complaints. Id. at
423. Only after the federal district court gave preclusive effect to
the state court ruling in favor of the town, did the FCC “review”
the federal district court’s decision and issue an order, which,
contrary to the federal district court, ruled that FCC regulations
preempted the town’s zoning regulation. Id. at 426. The Second
Circuit Court of Appeals held the FCC impermissibly rendered
the federal Article III court’s decision a mere advisory opinion.
Id. at 428-30.
The complexion of this case obviously is very different from
Deerfield. In Deerfield, the FCC acted as a disinterested
adjudicator to resolve a zoning dispute between two outside
parties; the FCC never disputed state or federal jurisdiction
over Mr. Carino’s lawsuits. In this case, the FAA became an
interested party in the administrative proceedings to determine
the Authority’s compliance with the grant assurances, and
never deferred its right to determine compliance issues in the
first instance. Moreover, although the FAA issued its decision
after the Colorado Supreme Court ruled on the propriety of the
permanent injunction against Centennial Express, the agency’s
—— ° ‘ e ‘ P
App. 13
e.g., Acacia Villa v. United States, 24 Cl. Ct. 445, 448 (1991)
(acknowledging the doctrine of issue preclusion is “based
on a court's exercise of its equitable powers,” and “is not
mandated in the Constitution or by statute”); United
States v. Kaytso, 868 F.2d 1020, 1022 (9th Cir. 1989) (stating
“[e]ven when the elements of collateral estoppel are pre-
sent, the decision whether to apply the doctrine is within
the [court’s] discretion”); Western Group Nurseries, Inc. v.
Pomeranz, 867 P.2d 12, 15 (Colo. Ct. App. 1993) (ruling
collateral estoppel is an equitable doctrine applied at the
court’s discretion).
Turning to supremacy principles, we reiterate that
the issue before the FAA was whether the Authority
complied with the conditions imposed on it by federal
law and agreement with a federal administrative agency,
in return for the Authority’s receipt of federal funds. This
federal scheme regulating airport grant compliance is
“designed in part to insure the maintenance of conditions
essential to an efficient national air transport system,
including access to airports on a reasonable and non-
discriminatory basis.” City & County of San Francisco v.
FAA, 942 F.2d 1391, 1395 (9th Cir. 1991), cert. denied, 503
U.S. 983 (1992). On this point, we must agree with the
Fifth Circuit that in the arena of aviation regulation “fed-
eral concerns are preeminent,” and the Department of
Transportation, through the FAA, is statutorily mandated
to represent those concerns. American Airlines, Inc., 202
F.3d at 800-01. Indeed, it is “difficult to visualize a more
decision in no way purported to “review, alter, or prevent
enforcement of the judgment of an Article III court.” Id. at 430.
App. 14
comprehensive scheme of combined regulation, subsidiz-
ation, and operational participation than that which Con-
gress has provided in the field of aviation.” New England
Legal Found. v. Massachusetts Port Auth., 883 F.2d 157,
172-73 (1st Cir. 1989) (discussing the FAA’s primary role
in administering and ensuring compliance with grant
assurances) (quotation marks and citation omitted). This
certainly tilts the balance toward the application of
supremacy principles to protect against state courts
trumping the federal interests and concerns embodied
within the airport grant program.
As to the potential impact of the Colorado Supreme
Court’s ruling in Arapahoe County Public Airport Authority
v. Centennial Express Airlines on federal regulation of the
airport grant program, we perceive a direct and signifi-
cant conflict inasmuch as this and similar state court
rulings, if deemed preclusive, would frustrate the FAA’s
ability to discharge its statutory duty to interpret and
implement federal aviation statutes governing the
enforcement of grant assurances. See 49 U.S.C. § 47122. If
given preclusive effect, state court rulings favoring local
airport authorities in actions tangentially involving fed-
eral grant assurances would further lead to inconsistent
enforcement of the federally mandated assurances, poten-
tially jeopardizing the efficiency and equality of access to
our Nation’s air transportation system. For these reasons,
we hold the strong policy of federal supremacy in the
field of aviation prevails over full faith and credit princi-
ples in this case. The Colorado Supreme Court’s decision
in Arapahoe County Public Airport Authority v. Centennial
Express Airlines therefore has no bearing on the FAA
decision before us.
App. 15
Determinations based on Safety and Other Civil
Aviation Needs
The Authority argues that as the proprietor of Cen-
tennial Airport responsible for local and regional aviation
planning, it, and not the FAA, determines whether sched-
uled passenger service will be prohibited at the Airport
as necessary for the safe operation of the airport and to
serve the civil aviation needs of the public. In support of
this argument, the Authority relies largely on the Colo-
rado Supreme Court’s conclusion the ban on scheduled
passenger service was, indeed, necessary for the safe
operation of Centennial Airport and to serve the public’s
civil aviation needs. As discussed above, that state court
conclusion has no bearing on our decision.
Aside from its reliance on the state court decision, the
Authority attempts to retry its case here by convincing us
it has good reasons for imposing the ban (including, but
not necessarily limited to, the design of and lack of
facilities at Centennial Airport; local and regional plan-
ning objectives; and the recommendations incorporated
_ in the National Transportation Safety Board’s Commuter
Airline Safety Study). Our job, however, is not that of
fact-finder. We are called on here to review the decision
of a federal administrative agency, and we will adhere to
the appropriate standards governing such review, as pre-
viously articulated in this opinion. See 49 U.S.C.
§ 46110(c); Wyoming Farm Bureau Fed’n, 199 F.3d at 1231.
We begin by addressing what we consider the thresh-
old legal issue - whether the Authority is preempted by
federal statute from imposing such a ban. The Airline
App. 16
Deregulation Act of 1978 expressly provides that a politi-
cal subdivision of a state “may not enact or enforce a law,
regulation, or other provision having the force and effect
of law related to a price, route, or service of an air
carrier.” 49 U.S.C. § 41713(b)(1). The Supreme Court has
interpreted this provision broadly to preempt all “State
enforcement actions having a connection with or refer-
ence to airline ‘rates, routes, or services.’ “ Morales v.
Trans World Airlines, Inc., 504 U.S. 374, 383-84 (1992)
(interpreting 49 U.S.C. § 1305(a)(1), the substantively
identical, pre 1994 version of the Airline Deregulation Act
preemption provision); see also American Airlines, Inc. v.
Wolens, 513 U.S. 219, 223 & n.1 (1995). The preemption
provision does not, however, prevent a state or political
subdivision of a state from carrying out its “proprietary
powers,” 49 U.S.C. § 41713(b)(3), so long as the exercise
of proprietary powers is reasonable, nondiscriminatory,
nonburdensome to interstate commerce, and designed
not to conflict with the Airline Deregulation Act and its
policies. See 14 C.F.R. § 399.110(f). The validity of the
Authority’s ban therefore depends on (1) whether the
Authority’s ban “is related to a price, route, or service of
an air carrier” implicated by 49 U.S.C. § 41713(b)(1); (2) if
so, whether the Authority’s ban amounts to an exercise of
its propriety [sic] powers; and (3) if it is an exercise of
proprietary powers, whether such exercise is reasonable,
nondiscriminatory, nonburdensome and not in conflict
with the Airline Deregulation Act, and thus exempted
from preemption by 49 U.S.C. § 41713(b)(3).
We easily conclude the Authority’s ban is connected
with and relates to both services and routes. See Morales,
504 U.S. at 384. By banning scheduled passenger service,
3
4
x
‘
!
2
App. 17
the Authority has affirmatively curtailed an air carrier’s
business decision to offer a particular service in a particu-
lar market. The ban also significantly impacts the scope
of services available to public citizens desiring to travel
by air from Centennial Airport. We reject any contention
that “service” as used in 49 U.S.C. § 41713(b)(1) is not
intended to include transportation itself, considering the
Airline Deregulation Act’s objective to enhance “the
availability of a variety of adequate, economic, efficient,
and low-priced services,” 49 U.S.C. § 40101(4), and to
“encouragle] entry into air transportation markets by
new and existing air carriers and the continued strength-
ening of small air carriers to ensure a more effective and
competitive airline industry.” 49 U.S.C. § 40101(13); see
also Hodges v. Delta Airlines, Inc., 44 F.3d 334, 336 (5th Cir.
1995) (en banc) (“Elements of the air carrier service
. . include items such as ticketing, boarding procedures,
provision of food and drink, and baggage handling, in
addition to the transportation itself.”).
The effect of such a ban further extends to route
determinations because the carrier cannot conduct regu-
lar operations over any route involving the banned air-
port. We agree with the FAA that a prohibition on
operating over any route is no less a regulation of routes
than a restriction on the number of routes a carrier can
operate from an airport.
Having determined the Authority’s ban on scheduled
passenger service constitutes a state regulation of air
carrier service and routes, the ban is permissible only if it
constitutes an exercise of the Authority’s propriety [sic]
power. Although the Authority largely evades a direct
discussion of the preemption issue in its briefs to this
App. 18
court, it suggests the scheduled passenger service ban is
per se an exercise of its propriety [sic] power, because
Grant Assurance 22i (patterned after Standard Assurance
221, see 62 Fed. Reg. 29761, 29766 (1997)) permits the
Authority to “prohibit or limit any given type, kind or
class of aeronautical use of the airport if such action is
necessary for the safe operation of the airport or neces-
sary to serve the civil aviation needs of the public.” Thus,
because the Authority determined “the ban was neces-
sary for the safe operation of Centennial [Airport] and to
serve the civil aviation needs of the public,” it argues the
proprietary powers exception to the statutory preemption
provision applies.
“The precise scope of an airport owner’s proprietary
powers has not been clearly articulated by any court.”
American Airlines, Inc., 202 F.3d at 806. Courts have, how-
ever, “recognized that local proprietors play an extremely
limited role in the regulation of aviation.” Id. (quotation
marks and citation omitted). This acknowledgment alone
undermines the Authority’s apparent assertion that so
long as they declare their regulatory action necessary for
safety or to satisfy aviation needs, they enjoy carte
blanche power. For purposes of this review, however, we
will assume, without deciding, that regulatory conduct
related to safety and civil aviation needs may £2!) under
the “proprietary powers” umbrella, because under any
circumstances, grant assurance language notwithstand-
ing, “[iJn defining the permissible scope of a proprietor’s
power to regulate under § 14713(b)(3) . . . an airport
proprietor can issue only ‘reasonable, nonarbitrary, and
nondiscriminatory rules that advance the local interest.’ ”
Id. (quoting Western Air Lines v. Port Auth. of New York &
:
-
3
App. 19
New Jersey, 658 F.Supp. 952, 958 (S.D.N.Y. 1986)). We
therefore proceed to the third and final preemption
inquiry.
At this point, we focus on whether the Authority’s
proclaimed “safety” and “civil aviation needs” justifica-
tion is reasonable or nonarbitrary. We agree with the FAA
this determination is a factual one for which the Author-
ity, as the party asserting the justification, bears the bur-
den of proving before the agency. See 14 C.F.R.
§ 16.229(c). Because of the fact-based nature of this
inquiry, we must defer to the FAA’s findings (1) the
Authority failed to demonstrate the ban is necessary for
the safe operation of the airport, and (2) the Authority
failed to demonstrate the ban is necessary to satisfy the
public’s civil aviation needs, so long as those findings are
supported by substantial evidence in the record.’ 49
U.S.C. § 46110(c); Wyoming Farm Bureau Fed’n, 199 F.3d at
1231. We conclude they are.
Our careful review of the administrative record con-
firms a dearth of evidence to support the Authority’s
claim that the ban on scheduled service is necessary due
to ground congestion, operational safety and environ-
mental impact concerns. As noted by the FAA hearing
officer, the testimony of individuals representing both the
Authority and the City was largely speculative. The
9 Although the Authority did not directly challenge the
reasonableness of the FAA’s findings on economic
discrimination and exclusive rights, having carefully reviewed
the administrative record, we conclude those findings are
supported by substantial evidence, and therefore deem them
conclusive.
App. 20
Authority and City submitted no quantitative analysis of
the probable impacts of scheduled passenger airline ser-
vice at Centennial airport. Conversely, the testimony of
Mr. Barry Molar, Manager of FAA’s Office of Airport
Compliance, and other FAA representatives effectively
rebutted the Authority’s and City’s evidence,!° demon-
strating that the Authority’s concerns pertain to impacts
that are “largely a function of the total number of opera-
tions at the airport,” and are not particularized to sched-
uled passenger service. In other words, the record
substantiates the FAA’s ruling that “[i]Jnasmuch as the
Authority permits unscheduled passenger services using
similar airplanes, flight patterns, making the same
amount or more of noise, and does not limit the number
10 For example, the Authority relies heavily on a general
National Transportation Safety Board (NTSB) recommendation,
derived from a Commuter Airline Safety Study (and Quincy
Aircraft Accident Report), that scheduled passenger service be
permitted only at airports certified pursuant to 14 C.F.R. Part
139. According to the Authority, it is not certified under Part 139
and has no intent to become certified. Moreover, the Authority
claims it must rely on off-the-airport and non-exclusive fire
protection services, which cannot respond to an airport
emergency within three minutes. The Authority further claims it
does not have the financial resources to provide exclusive, on-
the-airport fire and rescue services.
In rebuttal, the FAA put into evidence proof the NTSB
recommendation is a nonbinding recommendation which
neither the Authority nor the FAA must follow, and Centennial
Airport is not subject to a three-minute fire response time
requirement. The FAA also elicited testimony the fire safety
concern is no different for scheduled passenger service than it is
for unscheduled, charter passenger service. Finally, the FAA
demonstrated the Authority imposed the ban on scheduled
passenger service prior to publication of the NTSB report.
a
}
}
App. 21
of operations at the airport,” the Authority fails to dem-
onstrate how the ban on scheduled passenger service will
alleviate the safety concerns and civil aviation needs the
Authority and the City raise.
Because the record supports the FAA’s findings that
the Authority unreasonably exercised its proprietary
powers to ban scheduled passenger service at Centennial
Airport, we hold the Authority has exceeded its legiti-
mate scope of power as a state or local government under
49 U.S.C. § 41731(b) and the Supremacy Clause of the
United States Constitution. See U.S. Const. art. VI, cl. 2.
The Authority’s ban therefore is preempted by federal
law.
Limitations on Scheduled Passenger Service
The Authority and the City assert that even if the ban
on scheduled passenger service is unlawful, we should
require the FAA to rule that passenger operations at
Centennial Airport must be limited to nine-passenger
aircraft in light of 1996 legislative amendments requiring
airports to have a Part 139 certificate for scheduled pas-
senger operations involving aircraft of more than nine
passenger seats. See 49 U.S.C. § 44706(a)(2). Centennial
Airport does not have such a certificate. Furthermore, the
statute provides that the FAA cannot force the Authority
to obtain a certificate. See id. at § 44706(f).
The FAA concluded it was unnecessary to resolve
this issue because (1) the amended statute had not taken
effect; and (2) the ban on scheduled passenger service at
issue is total, providing no exception for aircraft with
nine or fewer passenger seats, as evidenced by the fact
App. 22
the Authority sought and obtained an injunction against
Centennial Express’s six-passenger aircraft. We likewise
decline to resolve this issue as it is not presented by the
facts in this case. The Authority does not dispute that its
ban on passenger service, as considered by the FAA, is
indeed a total ban; nor does the Authority claim it has a
pending request to provide service which would justify
further consideration of the amended statute.
CONCLUSION
Because we hold (1) the Colorado Supreme Court's
decision in Arapahoe County Public Airport Authority v.
Centennial Express Airlines is not final, preclusive or dis-
positive of the issues resolved in the FAA’s final order; (2)
the Authority’s ban on scheduled passenger service is
preempted by statute and the Supremacy Clause; and (3)
the present facts do not warrant prospective consider-
ation of how 49 U.S.C. § 44706, as amended in 1996,
might apply, we DENY the Authority’s Petition for
Review and AFFIRM the FAA’s final Order.
a ee ee es
ah
App. 23
UNITED STATES DEPARTMENT OF TRANSPORTATION
FEDERAL AVIATION ADMINISTRATION
WASHINGTON, DC
CENTENNIAL EXPRESS FAA Order No. 1999-1
AIRLINES, GOLDEN (Part 16, Subpart G)
EAGLE CHARTERS d/b/a
CENTENNIAL EXPRESS 2%®:
AIRLINES Docket Nos. 16-98-05,
13-94-03
Vz.
ARAPAHOE COUNTY
PUBLIC AIRPORT
AUTHORITY
THOMAS KEHMEIER Docket No. 13-94-25
Vv.
ARAPAHOE COUNTY
PUBLIC AIRPORT
AUTHORITY
No Separate Docket
FEDERAL AVIATION Number!
ADMINISTRATION
V.
ARAPAHOE COUNTY
PUBLIC AIRPORT
AUTHORITY
1 Under 14 C.F.R. § 16.203(b)(1), the agency became a party
when the Director of the FAA Office of Airport Safety and
Standards issued his determination providing the Airport
Authority the right to a hearing.
App. 24
FINAL AGENCY DECISION AND ORDER
I. Introduction
The question at the heart of this appeal is the lawful-
ness of a Federally-assisted airport operator’s ban on all
scheduled passenger service. At stake is the airport oper-
ator’s eligibility for additional Federal grants.
II. Background
Arapahoe County Public Airport Authority (the Air-
port Authority) owns and operates Centennial Airport,
which is outside of Denver, Colorado. Over the years, the
Airport Authority has received millions of dollars in air-
port improvement grants from the Federal Aviation
Administration (FAA). In exchange for the funds, the
Airport Authority signed a grant assurance promising not
to grant any person or persons exclusive rights, and
another promising to make the airport “available for pub-
lic use on reasonable conditions and without unjust dis-
crimination.” Under the latter assurance, however, the
airport operator may “prohibit or limit any given type,
kind, or class of aeronautical use . . . if such action [is]
necessary for the safe operation of the airport or neces-
sary to serve the civil aviation needs of the public.”
Beginning in 1985, Centennial Express contacted the
Airport Authority about starting scheduled 14 C.F.R. Part
135 passenger service at Centennial Airport. On February
20, 1989, the Airport Authority published the following
statement in its newsletter:
. . . (C]ommercial service has always existed at
Centennial in the form of Part 135 charter/air
App. 25
taxi certification, which permits “for hire” pas-
senger and freight service, whether scheduled or
unscheduled Such activity may not be prohibited
but is limited to aircraft with 30 seats or less.
(Director’s Determination at 12; emphasis added.) On
October 3, 1989, the Airport Authority’s newsletter con-
tained the following statement:
No scheduled air carrier, either large or small,
has applied to the Authority to operate at the
airport. Should any apply, the Authority will
consider only the smaller, regional air service
applications. No action will be taken by the
Authority to consider such applications, how-
ever, without extensive community input and
public hearing.
Id.
On December 12, 1991, Centennial Express sent the
: Airport Authority a letter asking the Airport Authority to
: set standards that would allow Centennial Express to
: operate scheduled passenger service. Centennial Express
: alleges that the Airport Authority notified Centennial
Express that it was revising its airport policy statement
: and needed to complete the revision before it would
: enact minimum standards for scheduled passenger ser-
vice under Part 135.
On March 12, 1992, the Airport Authority adopted a
policy statement that stated as follows:
The Authority reaffirms the original intent of
the airport to service the general aviation com-
munity. To this end, Centennial will continue to
accommodate aircraft operating under Federal
App. 26
Aviation Regulations Part 135/Operations Spec-
ifications 135 (30 or fewer seats). Requests for
scheduled air service shall be reviewed for com-
pliance with this policy, the established weight
limit, and the application minimum standards.
(Director’s Determination at 13.)
On April 8, 1993, the Airport Authority imposed a
moratorium on considering applications for scheduled
passenger service. Nevertheless, on May 7, 1993, Centen-
nial Express Airlines (Centennial Express) — having
acquired Golden Eagle Charters and its operating certifi-
cate, aircraft, and organization — applied to the Airport
Authority to conduct scheduled passenger service at Cen-
tennial Airport. The Airport Authority did not approve
Centennial Express’s application. On September 8, 1994,
the Airport Authority issued a policy statement banning
scheduled passenger service at Centennial Airport.
On December 20, 1994, Centennial Express initiated
scheduled passenger service between Centennial Airport
and Dalhart, Texas with one six-passenger Beechcraft air-
craft.2 At the time, Centennial Express possessed both
Federal safety and Federal economic authority to conduct
scheduled passenger service operations at Centennial
Airport. Two days later, the Airport Authority obtained a
temporary restraining order from the District Court,
County of Arapahoe, State of Colorado, prohibiting Cen-
tennial Express from providing scheduled service at Cen-
tennial Airport. On December 23, 1994, the U.S.
Department of Transportation sent the Airport Authority
an sna letter stating that it was arbitrary to exclude a
|
) 7
FAA Exhibit 1, Item 6.
2
BCI A RL MA CL ap
tT gn EA RRS ES at Ma ERIE EAN AO OAD dis Be Be SH Me
7
4
;
App. 27
particular class of service for factors not reasonably
related to the impacts of that service. On January 10,
1995, the Airport Authority obtained a permanent injunc-
tion from the same court. In January 1995, Centennial
Express voluntarily surrendered its Part 135 operating
certificate to the FAA.
On August 7, 1994, Thomas Kehmeier, a shareholder
of Centennial Express, filed a formal complaint with the
FAA, in Docket No. 13-94-25, as a private citizen, alleging
that the Airport Authority violated Federal law and its
grant assurances by imposing a moratorium on consider-
ing applications for scheduled passenger service at Cen-
tennial Airport. On January 30, 1995, Centennial Express
also filed a formal complaint with the FAA, in Docket No.
13-95-03, alleging that the Airport Authority had improp-
erly prohibited scheduled passenger service at Centennial
Airport. Both complaints were filed under 14 C.E.R. Part
13, entitled “FAA Investigative and Enforcement Pro-
cedures.” 14 C.F.R. Part 13, Subpart D. After the Rules of
Practice for Federally-Assisted Airport Proceedings con-
tained in 14 C.FR. Part 16 went into effect,3 Centennial
Express filed a second complaint under Part 16 on Febru-
ary 23, 1998 (Docket No. 16-98-05). Centennial Express’s
Part 16 complaint contained the same allegations as its
Part 13 complaint. The FAA consolidated the Part 13
dockets and their administrative records into the Part 16
proceeding to avoid duplicative proceedings and to
assure that the agency met the Part 16 time requirements
for the Part 16 complaint.
3 The Rules of Practice contained in Part 16 went into effect
on December 16, 1996. 61 Fed. Reg. 53,998 (October 16, 1996).
App. 28
Meanwhile, Centennial Express was appealing the
permanent injunction through the Colorado courts. On
December 12, 1996, the Colorado Court of Appeals
reversed the permanent injunction granted by the District
Court. Arapahoe County Public Airport Authority v. Centen-
nial Express Airlines, Inc., 942 P.2d 1270 (Colo. App. 1996).
While the case was on appeal to the Colorado Supreme
Court, the state of Colorado dissolved Golden Eagle
Charters, the subsidiary of Centennial Express, in May
1997 after Golden Eagle failed to file its 1997 corporate
report.
On April 13, 1998, the Colorado Supreme Court ruled
that the Court of Appeals erred in reversing the perma-
nent injunction. Arapahoe County Public Airport Authority
v. Centennial Express Airlines, Inc., 956 P.2d 587 (Colo.
1997) (en banc). The FAA was not a party to the state
court proceedings and did not participate in developing
the state court record. The Colorado Supreme Court
declined to defer to the FAA’s primary jurisdiction. It
found that the issue was not Federally preempted under
the 49 U.S.C. § 41713(b)(1) provision prohibiting state or
local regulation of “price, route or service of an air car-
rier” but rather fell within the proprietor exception in
§ 41713(b)(3). The majority also held that the ban did not
violate the FAA grant assurance requiring the sponsor to
“make its airport available as an airport for public use on
fair and reasonable terms without unjust discrimination
to all types, kinds, and classes of aeronautical users.”
Additionally, the majority said that “the authority’s ban
on scheduled service is necessary to ensure safe operation
of the airport” and that “increased congestion is sure to
have an impact on safety.” Id. at 596.
thr bb int St obi wih oles ORE Lt
Nelo One 6 Mae eR EE I WS A ihr iid a8
~~
eR aR Posen Pe Medes Bid oR’ ait
App. 29
After investigation, the Director of the FAA’s Office
of Airport Safety and Standards rendered an initial deter-
mination on August 21, 1998, under 14 C.F.R. § 16.31
regarding the complaints filed by Centennial Express and
Thomas Kehmeier. The Director found that the FAA was
not bound by the Colorado Supreme Court's decision. He
determined that the Airport Authority violated Federal
law and its grant assurances by banning scheduled ser-
vice at Centennial Airport.
The Airport Authority requested a hearing under 14
C.F.R. Part 16, Subpart F. On September 28, 1998, the
Deputy Chief Counsel issued a Hearing Order identifying
the parties and issues. Prior to the hearing, Greenwood
Village moved to intervene as a party under 14 C.F.R.
§ 16.207, and the hearing officer granted the motion.
The hearing was held on November 12-13, 1998, in
Denver, Colorado. The hearing officer’s initial decision
affirmed the Director’s determination on all issues. The
Airport Authority and Greenwood Village have filed the
instant appeal of the hearing officer’s initial decision.+
4 Citing 14 C.F.R. § 16.19, the City of Greenwood Village has
filed a motion to strike a number of alleged factual
misstatements in the reply brief of the FAA Office of Airport
Safety and Standards. In response, counsel for the FAA Office of
Airport Safety and Standards has filed a document in which it
claims that Greenwood’s motion was actually an impermissible
additional brief that should be stricken.
The FAA Office of Airport Safety and Standards is correct
that additional legal argument would be impermissible, because
the rules of practice permit only one brief per party. 14 C.F.R.
§ 16.241(f)(2) (“parties may file one brief on review to the
Associate Administrator”). Greenwood’s motion, however,
App. 30
Under the Rules of Practice the Hearing Officer may
“issue an initial decision or rule in a party’s favor only if
the decision or ruling is supported by, and in accordance
with, reliable, probative, and substantial evidence con-
tained in the record and is in accordance with law.” 14
C.F.R. § 16.227. Otherwise, the Hearing Officer’s decision
or ruling is subject to reversal. This standard of proof will
guide the following discussion of the parties’ arguments
on appeal.>
III. Standing
Greenwood Village argues that the Hearing Officer
should have dismissed the complaints because Complain-
ants Centennial Express/Golden~Eagle Charters and
Thomas Kehmeier lack standing under 14 C.F.R. Part 16.
Greenwood points out that Centennial Express no longer
holds a Part 135 air carrier certificate and Golden Eagle
Charters has been dissolved. As for Kehmeier, Green-
wood argues that he can no longer benefit from sched-
uled service at Centennial Airport because he has moved
away from Denver. Greenwood contends that as a share-
holder of Centennial Express, Kehmeier is simply a proxy
for Centennial Express and thus he lacks standing just as
Centennial Express does.®
briefly lists alleged factual misstatements. Thus, it does not
constitute an improper additional brief and it has been
considered in reaching this decision.
5 Any arguments not specifically addressed have been
considered and found to be without merit.
6 Greenwood has several additional arguments relating to
standing. Greenwood argues that the Hearing Officer erred in
App. 31
At the outset, it should be noted that standing
requirements in administrative adjudications are less
strict than in Federal court actions. As the court stated in
ECEE, Inc. v. Federal Energy Regulatory Commission, 645
F.2d 339, 349 (5th Cir. 1981):
Administrative adjudications ... are not...
article III proceeding[s] to which either the
“case or controversy” or prudential standing
requirements apply; within their legislative
mandates, agencies are free to hear actions
brought by parties who might be without stand-
ing if the same issues happened to be before a
federal court. Gardner v. FCC, 530 F.2d 1086,
1090-91 (D.C. Cir. 1976). Accord, Koniag, Inc.,
Village of Uyak v. Andrus, 580 F.2d 601, 611-17
(D.C. Cir.) (Bazelon, J., concurring), cert. denied,
439 U.S. 1052 (1978).
The Rules of Practice for Federally-Assisted Airport
Enforcement Proceedings in 14 C.F.R. Part 16 provide that
“[a] person directly and substantially affected by any
alleged non-compliance may file a complaint with the
Administrator.” 14 C.F.R. § 16.23(a). Assuming, arguendo,
suggesting that the Part 13, Subpart D complaints could cure the
lack of standing under Part 16, and that it is unfair for the
agency to apply only the sections of Part 16 that favor the
agency. Moreover, Greenwood believes that the Hearing Officer
erred in reasoning that because the FAA could have brought its
own case under 14 C.F.R. § 16.101, it is irrelevant whether these
particular Complainants lack standing. According to
Greenwood, the agency chose not to bring a case of its own, and
even if had it done so, it could not have based it on a live
controversy, because there is currently no Part 135-certificated
carrier seeking to offer scheduled service at Centennial Airport.
App. 32
that the standing requirement of Part 16 applies,” it is
difficult to imagine a stronger case for a direct and sub-
stantial effect on Complainants. The Airport Authority
obtained an injunction that immediately brought Centen-
nial Express’s scheduled passenger operations at Centen-
nial Airport to a halt, forcing it out of business there.
Kehmeier is a shareholder of Centennial Express and
therefore is directly and substantially affected by any
prohibition on Centennial Express’s revenue operations.
The very facts that Greenwood points to — the surrender
of the Part 135 certificate and the dissolution of Golden
Eagle Charters — are perhaps the most compelling evi-
dence possible that the Airport Authority’s alleged non-
compliance had a direct and substantial effect on Com-
plainants.§ As Kenneth Culp Davis states in § 24.1 of the
7 Arguably, the less stringent standing requirements of Part
13, Subpart D apply because Centennial Express and Thomas
Kehmeier filed their complaints under Part 13, Subpart D before
Part 16 came into existence. (Part 16 applies to complaints filed
and investigation initiated by the FAA on or after December 16,
1996. 14 C.F.R. § 16.1(d). For complaints filed earlier, Part 13,
Subpart D continues to apply.)
Part 13, Subpart D permits any person to file a complaint
with the Administrator with respect to anything done or
omitted to be done by any person in contravention of any
provision of any Act or any regulation or order issued under it,
as to matters within the jurisdiction of the Administrator. 14
C.F.R. § 13.5. For the agency to apply the stricter Part 16 rules for
standing and pleading to the complaints already accepted and
pleaded under more lenient rules in Part 13, Subpart D arguably
would have violated Complainants’ due process rights.
8 Section 16.23(a) does not state that the person directly and
substantially affected must hold a Part 135 certificate. Note that
the Airport Authority has admitted that it has the discretion to
App. 33
Administrative Law Treatise (2nd ed. 1983), “A main
objective in reforming the law of standing should be to
strip down the law to one simple proposition: one who is
adversely affected in fact should never be denied stand-
ing.”9
Even if Complainants lacked standing, dismissal of
the proceeding would be inappropriate at this point
because the FAA, with its statutory mandate to ensure
that Federally-funded airports comply with their grant
assurances, would remain as party and as prosecutor. The
FAA became a party after the Director of the FAA’s Office
consider an application for scheduled passenger service even
where the applicant does not possess an FAA operating
certificate at the time of application. Exhibit 20e.
° Greenwood argues that the Airport Authority’s ban on
scheduled passenger service caused neither the surrender of
Centennial Express’s Part 135 certificate nor the dissolution of
Golden Eagle Charters. It is hard to believe that no causal
connection exists, given the timing of the surrender
(immediately after the Airport Authority obtained an injunction
again [sic] Centennial Express’s scheduled operation).
Centennial Express went to some trouble to set up scheduled
operations at Centennial Airport. The injunction the Airport
Authority obtained halting Centennial Express/Golden Eagle
Charters’ scheduled passenger operations certainly would not
have helped the financial situation of Centennial Express and
Golden Eagle Charters.
Regardless, even if there was no causal connection between
the ban on the one hand and the surrender of the operating
certificate and dissolution of Golden Eagle Charters on the
other, the ban still had a direct and substantial effect on
Centennial Express - Centennial Express/Golden Eagle
Charters sought to operate scheduled passenger service at
Centennial Airport, but the Airport Authority obtained an
injunction stopping it from doing so.
App. 34
of Airport Safety and Standards issued his initial deter-
mination finding the Airport Authority in violation of
Federal law and its grant assurances and the Airport
Authority requested a hearing. The Rules of Practice pro-
vide that: “The parties to the hearing are the respon-
dent(s) named in the hearing order, the complainant(s),
and the agency.”29 14 C.F.R. § 16.203(b)(1) (emphasis
added). They further provide, in relevant part, that, “the
agency attorney will serve as prosecutor for the agency
from the date of issuance of the Director’s determination
providing an opportunity for hearing.” 14 C.F.R.
§ 16.203(b)(2) (emphasis added). In accordance with these
provisions, the Hearing Order named the FAA Office of
Airport Safety and Standards as a separate party, “as
prosecutor for the agency.” (Emphasis added.) See also 14
C.F.R. § 16.3, which defines “agency attorney” as an
attorney “who represents the FAA during the investiga-
tion of a complaint or at a hearing on a complaint, and
who prosecutes on behalf of the FAA.... ”
10 The FAA Office of Safety and Standards has indicated in
its reply brief that if the complaints were dismissed, the Director
would begin an investigation under 14 C.F.R. § 16.101. The FAA
does not need a “live” complainant to initiate an investigation.
Notice and the opportunity for informal resolution under
Section 16.101 at this point would be pro forma. The Airport
Authority has had ample notice of the FAA’s position, and the
Airport Authority’s refusal to comply with its grant assurances
after an FAA investigation and several decisions does not
suggest an interest in informal resolution. Under the
circumstances, complaint dismissal would be wasteful of
agency and taxpayer resources.
App. 35 -
Thus, the role of the FAA Office of Airport Safety and
Standards is not to represent Complainants, but to repre-
sent the agency, acting to protect the public interest. The
role of the private complainant is-simply to bring to the
agency’s attention apparent violations of airport grant
assurances. See 61 Fed. Reg. at 53,999 (October 16, 1996),
noting that the FAA is the party with the burden of proof
and that the Rules of Practice give Complainants party
status only to assist the FAA in the development of the
factual record.
In summary, Complainants Centennial Express and
Thomas Kehmeier have standing because the Airport
Authority’s ban on scheduled passenger service substan-
tially and directly affected them. In addition, the FAA has
standing by operation of the rules.1!
IV. Mootness
As for the Airport Authority’s and Greenwood’s
argument that this proceeding is moot, it\is undisputed
that the ban on scheduled passenger service continues in
11 While Greenwood claims that the FAA intentionally
destroyed evidence “highly relevant” to its standing claim - i.e.,
the Part 135 operator file for Centennial Express /Golden Eagle
Charters - the record indicates that the local FAA Flight
Standards District Office destroyed the file along with other
inactive files several years ago when moving FAA Denver-
based field offices to the new Denver International Airport. In
any event, Greenwood has not shown how the Part 135 file is
relevant to this proceeding.
App. 36
place at Centennial Airport.!2 Thus, this case presents a
live controversy because the FAA, as a party, has a genu-
ine interest in enforcing the applicable Federal statutory
provisions and grant assurances.}%
V. Due Process
Under the Rules of Practice in Part 16, a Hearing
Officer rather than an Administrative Law Judge presides
over the hearing. (See, e.g., 14 C.F.R. § 16.202, detailing
the powers of the Hearing Officer, which include presid-
ing over the hearing and issuing an initial decision.)
Greenwood argues that the FAA Deputy Chief Counsel
violated its due process rights by declining to amend the
hearing order to include the issue of whether the Hearing
Officer should have referred the case to an Administra-
tive Law Judge for a hearing under the Administrative
Procedure Act (APA).
12 To support its mootness argument, Greenwood states
that there are currently no Part 135-certificated carriers seeking
to offer scheduled service at Centennial Airport. Assuming,
arguendo, that Greenwood’s representation is still accurate,
these proceedings are not moot because the Airport Authority
has conceded that one need not have.a Part 135 certificate at
time of application. In addition, the Airport Authority’s ban
would likely discourage potential carriers from applying to
operate scheduled service.
13 Also, because the mootness doctrine arises from the case
or controversy requirement for Article III courts, it does not
necessarily apply to proceedings before Article I executive
branch administrative proceedings.
App. 37
Greenwood’s Standing to Raise Issues
In this proceeding, the Director withheld approval of
the Airport Authority’s new grants - not Greenwood’s.
Greenwood is merely an intervenor.!¢ Under 49 U.S.C.
§ 47106(d), the statute under which the Director’s Deter-
mination withheld approval of new grants, only the Air-
port Authority, as the airport sponsor, may request a
hearing. Significantly, the Airport Authority, the only
respondent with the statutory right to a hearing, has not
argued that an Administrative Law Judge rather than the
Hearing Officer should have heard its case.
Greenwood, having no right to request a hearing, is
outside the “zone of interests” protected by 49 U.S.C.
§ 47106(d). Clarke v. Securities Industry Association, 479
U.S. 388 (1987). As a result, Greenwood is without stand-
ing to raise the issue of who should have heard this case.
Inapplicability of APA
Even if the Airport Authority, rather than Green-
wood, had raised the same argument -— 7.e., that the APA
requires that an administrative law judge hear this case
— it would still fail. Greenwood argues as follows:
14 The section in the Rules of Practice regarding
intervention provides that “Participation under this section is at
the discretion of the FAA, and no decision permitting
participation shall be deemed to constitute an expression by the
FAA that the participant has such a substantial interest in the
proceeding as would entitle it to judicial review of such
decision.” 14 C.F.R. § 16.207(d). ©
App. 38
... the Hearing Officer did not satisfy the APA’s
separation of functions doctrine because he is an
FAA attorney in the Procurement Legal Division
of the Office of the Chief Counsel. The Office of
the Chief Counsel is responsible, inter alia, for
investigations and enforcement actions by the
FAA. The Hearing Officer, therefore, was con-
spicuously under the supervision and direction
of an agency employee who is engaged in the
performance of investigative or prosecuting
functions for the agency. Since the Hearing Offi-
cer and FAA investigators are responsible to the
FAA Administrator through the same chain of
authority (the Chief Counsel), the Hearing Offi-
cer’s role as adjudicator in this case violated the
APA.
(Appeal Brief at 33.)
The APA, however, does not apply to hearings pro-
vided under 49 U.S.C. §§ 47106(d) & 47111(d).15
15 The wording of 49 U.S.C. § 47106(d) indicates that
Congress did not intend to require full agency adherence to all
APA Section 554 components. Unlike another part of the same
statute (the Airport and Airway Improvement Act of 1982, as
amended) which is subject to the APA and which expressly
requires a hearing before an administrative law judge under 14
C.F.R. Part 302 [see 49 U.S.C. 47129(c)], 49 U.S.C. § 47106(d) only
requires “an opportunity for a hearing.” Section 554 of the APA
does not apply where the statute, rather than requiring a
hearing on the record, simply requires an opportunity for a
hearing without more. Friends of the Earth v. EPA, 966 F.2d 690,
6593 (D.C. Cir. 1992); St. Louis Fuel and Supply Co. v. FERC, 890
F.2d 446, 448 (D.C. Cir. 1989).
App. 39
Part 16’s Separation of Functions Provision
Although the APA does not apply, to ensure the
integrity of the decisionmaking process, the Rules of
Practice in 14 C.F.R. Part 16 include a provision separat-
ing investigative/prosecutorial functions from adjudica-
tive/decisionmaking functions. See 14 C.F.R. § 16.5(b),
providing that an agency employee who investigates or
prosecutes will not advise or communicate substantively
about the case with the hearing officer or the Associate
Administrator regarding their respective decisions
(except as counsel or witness in public proceedings).'©
Contrary to Greenwood’s argument, the Chief Coun-
sel is not an investigator/prosecutor under the Rules of
Practice in Part 16. Instead, the Chief Counsel advises the
Associate Administrator, who issues the agency’s final
decision in Part 16 cases. See 14 C.F.R. § 16.5(c), stating
that “[t]he Chief Counsel . . . advises the Associate
Administrator .. . regarding any case brought under this
part.” Thus, the Chief Counsel’s function in Part 16 cases
is adjudicative, not investigative or prosecutorial.
The only attorneys who investigate and prosecute
Part 16 cases are “agency attorneys.” See 14 C.F.R. § 16.5,
providing that “[p]roceedings under this part . . . will be
prosecuted by an agency attorney.” The Rules of Practice
16 As the FAA explained in the Notice of Proposed
Rulemaking for 14 C.F.R. Part 16: “Separation of functions is not
required by statute because hearings under part 16 would not be
subject to APA hearing requirements; however, the separation is
provided to promote confidence in the impartiality and
integrity of decisions under the new procedures.” 59 Fed. Reg.
29,880, 29,883 (June 9, 1994).
App. 40
|
specifically define “agency attorney” to exclude the Chief
Counsel. See 14 C.F.R. § 16.3, providing that “an agency
attorney shall not include the Chief Counsel ....” The
record |contains no evidence that any agency employee
violated Section 16.5(b). The Hearing Officer was com-
pletely |independent of the Chief Counsel in all matters
pertaining to this case from the date of his appointment
until he issued his initial decision.
VI. Collateral Estoppel
Both the Airport Authority and Greenwood argue
that the Hearing Officer erred in failing to find that the
FAA must extend full faith and credit to the Colorado
Supreme Court’s decision.!”7 They argue that collateral
estoppel bars relitigation of the issues in the instant pro-
ceeding.
Collateral estoppel, or issue preclusion, is the branch
of the res judicata doctrine that prevents a party from
relitigating an issue of fact or law that has been decided
in an earlier suit. Wilder v. EPA, 854 F.2d 605, 616 (2d Cir.
1988). Section 1738 of 28 U.S.C. requires Federal courts to
give effect to the collateral estoppel rules of the state that
rendered a prior judgment where the same issues are
raised later in a Federal proceeding. Id. Section 1738 of 28
17 The Colorado Supreme Court upheld the State District
Court’s injunction on Centennial Express’s scheduled passenger
operations at Centennial Airport. The court held that Federal
law does not preempt the Airport Authority’s ban on scheduled
passenger service. It also held that the ban is necessary for the
safe operation of the airport and that it serves the civil aviation
needs of the public.
App. 41
U.S.C. directs that judicial proceedings of the court of any
State “shall have the same full faith and credit in every
court within the United States ... as they have by law or
usage in the courts of such State .. . from which they are
taken.” Federal administrative agencies as well as courts
must adhere to 28 U.S.C. § 1738. Midgett v. United States,
221 Ct. Cl. 171, 189 (1979).
To accord full faith and credit to a given state-court
judgment, a Federal court or administrative agency must
give a prior state-court judgment “the same preclusive
effect as would be given that judgment under the law of
the State in which the judgment was rendered.” Town of
Deerfield v. FCC, 992 F.2d 420, 428 (2nd Cir. 1993), quoting
Migra v. Warren City School District Board of Education, 465
U.S. 75, 81 (1984). See also American Mannex Corp. v.
Rozands, 462 F.2d 688, 690 (5th Cir. 1972) (stating that
“{ujnder 28 U.S.C. § 1738, the Federal court follows the
state rule of repose”). Thus, Colorado’s rules relating to
collateral estoppel bear examination.
Colorado’s Estoppel Requirements Unmet
Colorado’s highest court has held as follows:
Collateral estoppel, or issue preclusion, bars
relitigation of an issue determined in a prior
‘proceeding if: (1) the issue precluded is identical
to an issue actually determined in the prior pro-
ceeding; (2) the party against whom estoppel is
asserted has been a party to or is in privity with
a party in the prior proceeding; (3) there is a
final judgment on the merits in the prior pro-
ceeding; and (4) the party against whom the
doctrine is asserted has had a full and fair
App. 42
opportunity to litigate the issue in the prior
proceeding.
O’Neill v. Simpson, 958 P.2d 1121 (Colo. 1998).
In the instant case, several of the above-listed
requirements under Colorado law for collateral estoppel
are unmet. First, the Airport Authority and Greenwood
have attempted to assert estoppel not just against Centen-
nial Express and Thomas Kehmeier, but also against the
FAA.18 The FAA, however, was not a party to, nor was it
in privity with a party to, the prior proceeding.!? As a
result, the FAA did not have a full and fair opportunity to
litigate the issues in the prior proceeding.?°
While the Airport Authority and Greenwood argue
on appeal that Town of Deerfield v. FCC, 992 F.2d 420 (2d
18 For a discussion of the agency’s role as party to the
proceeding under the regulations, see supra p. 9.
19 Arguably, neither was Thomas Kehmeier. Kehmeier was
not a party to the prior proceeding and under Colorado law, he
may not have been in privity with any party, even though he
was a shareholder of Centennial Express, which was a party to
the prior proceeding. In Falkenberg v. Sternberg, 388 P. 2d 771
(Colo. 1964), the Colorado Supreme Court held that a corporate
president who owned 98% of the corporate stock was not
precluded from asserting a claim in his individual capacity
against an architect even though a similar claim by the
corporation had been dismissed in a prior proceeding. See also
Foley Custom Homes v. Flater, 888 P.2d 383, 364 (Ct. App. 1994),
citing Falkenberg v. Sternberg, 388 P. 2d 771 (Colo. 1964) and
holding that Foley Custom Homes, a closely held corporation,
and Daniel Foley, who owned 50% of the company’s stock, were
not in privity.
20 The FAA simply does not have the resources to intervene
in the innumerable state court proceedings in which aviation
issues arise.
App. 43
Cir. 1993) supports their argument that collateral estoppel
applies, Deerfield is distinguishable. In Deerfield, in the
proceeding before the FCC, the party against whom
estoppel was sought (an individual named Joseph Car-
ino) had been a party to the prior proceedings in both
state and Federal court. The FCC was not a party to either
the prior proceedings in state or Federal court, or to the
proceedings before the FCC. Thus, in Deerfield, the collat-
eral estoppel requirement under Colorado law of identity
of parties was met, whereas the requirement is not met in
the instant case.?!
Second, even if collateral estoppel applied to some of
the issues in the instant proceeding, it would still not
apply to all of them. The Colorado Supreme Court did
not decide all of the issues in the instant proceeding. A
close examination of the court’s opinion reveals that it
did not decide whether the Airport Authority violated
Federal law relating to the granting of exclusive rights,
which forms the basis for two of the six independent
findings in the Director’s Determination.
21 Deerfield is also distinguishable because the FCC issued
an order that conflicted with that of a Federal Article III court.
Under the Constitution, Federal Article III courts may decide
only “Cases” or “Controversies.” U.S. Const. Art. III, § 2, cl. 1.
They are not permitted to render advisory opinions. Deerfield,
992 F.2d at 427. The U.S. Court of Appeals for the Second Circuit
held that the FCC, by issuing a decision that conflicted with that
of a Federal District Court, had improperly attempted to render
a Federal Article III court’s decision a mere advisory opinion. Id.
at 428-29.
In contrast, in the instant case, a Federal Article III court has
_ never decided any of the issues.
App. 44
Supremacy Clause Trumps 28 U.S.C. § 1728
In any event, 28 U.S.C. § 1728, which directs that
Federal courts and agencies must give state court judg-
ments full faith and credit, is limited by the Supremacy
Clause of the U.S. Constitution. Midgett, 221 Ct. Cl. at 189.
Federal courts will not give effect to a judgment or decree
of a state court that would restrain the exercise of sover-
eign power of the United States by imposing require-
ments that are contrary to important and established
Federal policy. Id., citing Byrd v. Blue Ridge Cooperative,
356 U.S. 525 (1957); Red Fox v. Red Fox, 564 F.2d 361, 365
n.3 (9th Cir. 1977); American Mannex Co. v. Rozands, 462
F.2d 688, 690 (5th Cir.), cert. denied, 409 U.S. 1040 (1972).22
The Colorado Supreme Court’s decision restrained
the sovereign power of the United States by upholding
and imposing a ban by a state authority on scheduled
passenger flights at a Federally-funded airport. The ban
violates Congress’ express prohibition, in 49 U.S.C.
§ 41713(b)(1), on state and local regulation of air carrier
rates, routes, or services. In the Airline Deregulation Act,
Congress preempted state and local regulation of rates,
routes, or services of air carriers to ensure that the states
would not undo Federal deregulation of domestic air
transport. Morales v. TWA, 504 U.S. 374, 378-379 (1992).
The Airport Authority’s ban on scheduled service is
inconsistent with the Airline Deregulation Act’s goals of
Ps
22 Even under Colorado law, collateral estoppel is an
equitable doctrine and need not be applied in every case.
Western Group Nurseries v. Pomeranz, 867 P. 2d 12, 15 (Ct. App.
Colo. 1993).
App. 45
furthering “the availability of variety of adequate, eco-
nomic, low-priced services without unreasonable dis-
crimination” (49 U.S.C. § 40101(4)), and “encouraging
entry into air transportation markets by new and existing
air carriers and the continued strengthening of small air
carriers to ensure a more effective and competitive airline
industry” (49 U.S.C. § 40101(13)).
A safe and efficient system of public use airports
cannot be maintained if each Federally-funded airport is
free to impose its own ban on certain types of air service
without an adequate basis in fact or law. The national
system would weaken and balkanize. See New England
Legal Foundation v. Massachusetts Port Authority, 883 F.2d
157, 172 (1st Cir. 1989), referring to the “[b]alkanizing
forces of state and local regulation,” and stating that in
reducing Federal economic regulation of aviation, Con-
gress did not intend to leave a vacuum for state and local
governments to fill.
VII. Burden of Proof
According to Greenwood, the Hearing Officer erred
in finding that the Airport Authority and Greenwood
bore the burden of proving that a ban on scheduled
passenger operations was necessary for the safe opera-
tion of the airport. Instead, Greenwood argues, the Hear-
ing Officer should have required the FAA to show that
the Director’s Determination (finding unlawful the Air-
port Authority’s ban on scheduled passenger service)
would “enhance safety and security” in air commerce in
the Denver region. To support its argument, Greenwood
cites 49 U.S.C. § 40101(d), which provides as follows:
App. 46
§ 40101. Policy
(d) Safety Considerations in Public Inter-
est. — In carrying ovt subpart III of this part [49
U.S.C. §§ 44101 - 45304, entitled “Safety”] and
those provisions of subpart IV [49 U.S.C.
§§ 46101 - 46507, entitled “Enforcement and
Penalties”] applicable in carrying out subpart
III, the Administrator shall consider the follow-
ing matters, among others, as being in the pub-
lic interest:
(1) assigning, maintaining, and enhancing
safety and security as the highest priorities in
air commerce.
49 U.S.C. § 40101(d).
Section 40101 of Title 49 does not apply. First, it does
not deal with the issue of the proper allocation of the
burden of proof. Second, it expressly applies only to
subpart 111 (49 U.S.C. §§ 44101 — 45304) and subpart IV
(49 U.S.C. §§ 46101 — 46507), whereas the authority for the
instant proceeding (the statute under which the Direc-
tor’s Determination withheld approval of new grants) is
49 U.S.C. § 47106(d). The Airport Authority allegedly
violated 49 U.S.C. § 47107(a)(1) regarding economic dis-
crimination; 49 U.S.C. §§ 47107(a)(4) and 40103(e), regard-
ing exclusive rights; and 49 U.S.C. § 41713(b)(1),
regarding Federal preemption of state regulation of air
carrier prices, routes, and services. None of these provi-
sions are found in subparts III and IV.
The allocation of the burden of proof in these pro-
ceedings is set by 14 C.FR. § 16.229. Under Section
16.229, the agency has the burden of proving noncom-
pliance with Federal law and the grant assurances, but a
party who asserts an affirmative defense has the burden
of proving the affirmative defense. 14 C.F.R. § 16.229(a) &
(b).
App. 47
The following facts are undisputed:
The Airport Authority’s defense in this proceeding
has been that its discrimination against scheduled pas-
senger service is justified. It argues that the grant assur-
ance regarding non-discrimination expressly permits the
airport sponsor to “prohibit . . . any type, kind, or class of
aeronautical use at the airport if . . . necessary for the safe
operation of the airport or . . . to serve the civil aviation
As a precondition for receiving Federal
funds, the Airport Authority agreed to make
the airport available for public use on rea-
sonable conditions and not to discriminate
unjustly.
When the Airport Authority accepted Fed-
eral funds, no ban on scheduled passenger
service existed.
After the Airport Authority had accepted
millions of dollars in Federal funds, it
imposed the ban.
The Airport Authority’s ban leaves the air-
port unavailable for a certain type of public
use - specifically, scheduled passenger ser-
vice. The ban also discriminates between
scheduled and unscheduled passenger ser-
vice.
needs of the public.”
App. 48
In determining what constitutes an affirmative
defense, fairness and convenience are relevant consider-
ations. WriGHT & MILLER, FEDERAL Practice & PROCEDURE:
Crvit 2p § 1271. Thus, if all or most of the relevant
information is within the control of the defending party,
then fairness and convenience suggest that the matter
should be considered an affirmative defense. Id. In the
instant case, the Airport Authority determined that safety
and the civil aviation needs of the public required its ban
on scheduled passenger service. The Airport Authority is
in the best position to provide the evidence on which it
based its safety and public needs determination.
Another relevant consideration in determining
whether a matter constitutes an affirmative defense is
whether the party bringing the action will be taken by
surprise by the assertion of the defense at the trial or
hearing if the defense is not pleaded affirmatively. Id.
This consideration also supports the Hearing Officer’s
determination that safety constituted an affirmative
defense. In the instant case, the agency and complainants
would have been taken by surprise if the Airport Author-
ity had not affirmatively pleaded the “safe operation and
public civil aviation needs” defense in its answer.
For these reasons, the Hearing Officer did not err in
ruling that the Airport Authority’s justifications for dis-
crimination constitute affirmative defenses which the Air-
port Authority had the burden of proving.
App. 49
XIII. Reasonableness of Justifications for Ban
A. Safe Operation of the Airport
The Airport Authority and Greenwood claim that the
ban on scheduled passenger service is necessary for the
safe operation of the aircraft. To support their claim, they
argue as follows:
e Centennial Airport lacks a terminal, baggage
claims system, and passenger security sys-
tem.
\
e There was testimony at the hearing that it is
a safety problem to mix different types of
aircraft in the same airspace environment.
e The National Transportation Safety Board
(NTSB) has recommended, as a class 2 prior-
ity action,» that the FAA seek legislative
action limiting scheduled passenger service
to airports holding Part 139 certificates?* and
Centennial Airport lacks a Part 139 certifi-
cate.
e The local fire department chief testified that
his personnel could not respond to fires at
Centennial Airport within 3 minutes, and
therefore, the chance of survivable crash vic-
tims was nearly zero.
<3 Ty. S99.
2414 C.F.R. Part 139 contains the rules governing the
certification and operation of land airports that serve any
scheduled or unscheduled passenger operations of air carriers
that are conducted with aircraft having a seating capacity of
more than 30 passengers. 14 C.F.R. § 139.1.
App. 50
e Scheduled passenger service would require
changes to Centennial Airport’s infrastruc-
ture to maintain crowd control.
There are a number of matters that undercut the
Airport Authority’s arguments that safety requires the
ban. First, the Airport Authority has failed adequately to
explain how a terminal and baggage system are necessary
for passenger safety. The connection is unclear.?> As for a
passenger security system, the FAA introduced into the
record evidence that there is no legal requirement for
security screening for the type of operation Centennial
Express proposed.?6
Second, while the Airport Authority has banned all
scheduled passenger operations, it permits the same sizes
and types of aircraft to carry passengers in unscheduled
operations.?” Thus, the testimony at the hearing that it is
25 A county commissioner testified at the hearing that a
terminal was needed to protect passengers from hail storms. Tr.
97. He admitted, however, that Centennial Express had
obtained, through a sublease, facilities through which to process
passengers. Tr. 99. The commissioner was unable to offer any
explanation as to how the lack of a baggage system presented a
safety problem, though previously he had signed an affidavit
stating that it did. Tr. 103.
26 Tr. 105-07. The FAA’s expert in aviation security testified
that the size of the aircraft determines whether FAA regulations
require screening. Tr. 426. Even when screening is required, the
air carrier rather than the airport operator ordinarily provides
for it. Tr. 430.
27 The airport already has weight limits for its runways that
would keep out aircraft that are too large to operate safely at the
airport. Tr. 90. In any event, FAA regulations prohibit aircraft
with a seating capacity of more than 30 passengers — scheduled
Py ae
App. 51
a safety problem to mix different types of aircraft in the
same airspace, even if accurate, is inapplicable. Further-
more, the fire department response time is no different
for passengers in unscheduled operations than it is for
passengers in scheduled operations.7* If the scheduled
passenger operations using the same types of aircraft are
unsafe, then how can the Airport Authority consider the
unscheduled passenger operations safe, given that the
only difference in the operations is whether the flights are
scheduled??? Also, all operations at the airport, whether
scheduled or unscheduled, would be conducted by pilots
tested and licensed by the FAA, would use aircraft certifi-
cated by the FAA for airworthiness, would follow FAA
operating rules, and would follow the direction of FAA
air traffic controllers.
Third, if the Airport Authority’s concern was that a
high level of operations was causing congestion in the air
or on the runways, affecting safety, then the Airport
Authority should have attempted more narrowly focused
alternatives first. The Airport Authority, however, admit-
ted in its answers to interrogatories that congestion,
or unscheduled — from operating at Centennial Airport, because
the airport lacks a Part 139 certificate. 14 C.F.R. § 139.101. See
also Tr. 229-30.
28 The fire station is located about a mile and a half from the
airport runways. Tr. 493.
29 At the hearing, the Mayor of Greenwood was asked the
following question: “There is nothing inherently more unsafe
about the fact that a Beechcraft King Air is flying over your
homes and schools on a scheduled basis as opposed to an
unscheduled basis, is there?” His reply was no. Tr. 232. See also
Tr. 417 (another witness to the same effect).
App- 52
capacity, and environmental effects were not among the
reasons for its ban on scheduled passenger service.*°
Fourth, the record does not support Greenwood Vil-
lage’s argument that crowd control would be a problem.
The Airport Authority banned Centennial Express’s oper-
ation with a single six-passenger aircraft. It is difficult to
believe that a scheduled operation using one six-pas-
senger aircraft could cause crowd control problems.
As for the NTSB recommendation, the Airport
Authority’s claim that the NTSB recommendation formed
the basis for the ban lacks credibility, given that the NTSB
issued its recommendation after the Airport Authority
banned scheduled operations. Thus, the Airport Author-
ity’s claim bears all the hallmarks of a post hoc rationaliza-
tion.3 Moreover, the NTSB recommendation was only a
recommendation. The FAA’s statutory duty is to decide if
the recommendation should be implemented, either in its
original or in a modified form. The FAA is not required to
follow NTSB recommendations.#2
For these reasons, the Airport Authority has failed to
bear its burden of proving that the safe operation of the
airport requires the ban.
30 Tr. 119-20.
31 Note too that numerous airports in the region, as well as
in the country as a whole, permit scheduled passenger service at
predominantly general aviation airports without a Part 139
certificate. Tr. 111.
32 Tr. 599.
App. 53
B. Civil Aviation Needs of the Public
The Airport Authority and Greenwood claim that the
ban on scheduled passenger service is necessary to serve
the civil aviation needs of the public. They argue that
permitting scheduled passenger service would conflict
with Centennial Airport’s designation as a general avia-
tion reliever airport, and that the FAA should defer to
regional and local planning.
Although Centennial Airport’s primary function may
be to serve general aviation, it does not logically follow
that any level of scheduled Part 135 service is inconsis-
tent with that primary function. The initiation of sched-
uled passenger service at Centennial Airport is unlikely
to change the predominately general aviation role of the
airport.33 The claim that permitting both scheduled and
unscheduled passenger operations would alter the char-
acter of the airport is speculative.*4 There have been no
33 The term “general aviation” does not have one generally
accepted meaning. In some FAA definitions, “general aviation”
does not include any air carriers, whether scheduled or
unscheduled. Nevertheless, a county commissioner conceded at
the hearing that the Airport Authority permits “a lot” of
unscheduled air carriers to operate at Centennial Airport. Tr.
122. The commissioner also conceded that the Airport Authority
has taken no significant actions to limit overall growth at the
airport other than to ban Centennial Express’s operation. For
example, in the past year, it signed a 40-year lease plus an
option to extend for 50 more years with a development
company that plans on spending at least $3 million on
infrastructure for a third fixed base operation on the airport. Tr.
122-23.
34 Note that there was testimony at the hearing that
Centennial Express’s proposed operations would have had an
App. 54
studies suggesting that scheduled passenger service
would reduce general aviation use of the airport.*° In the
unlikely event that scheduled passenger service ever
undermined the airport's reliever role, there were reason-
able and nondiscriminatory restrictions short of a total
ban which could have been attempted first. The Airport
Authority admitted in its answers to interrogatories that
ii did not consider any of these alternatives to meet the
civil aviation needs of the public before imposing the
ban.°¢ In fact, the Denver Regional Aviation System Plan
itself recognizes that an airport may be required by its
grant obligations to accept service that is inconsistent
with its primary purpose. The Airport Authority and
Greenwood do not dispute the Hearing Officer’s factual
finding that prior to 1993, the Airport Authority’s policies
permitted scheduled passengers [sic] service at Centen-
nial Airport, notwithstanding its general aviation desig-
nation in regional planning documents.
If anything, the civil aviation needs of the public
support the opposite policy — permitting scheduled ser-
vice as well as unscheduled service at Centennial Airport.
If the public does not want or need scheduled passenger
service at Centennial Airport, market forces will lead to
that result. The ban is both unnecessary and unlawful.
“insignificant” impact on the operations at Centennial Airport.
See, e.g., Tr. 496. -
35 Tr. 251.
36 See also Tr. 118-19.
App. 55
Multi-Airport Proprietor Rule
Congress made the receipt of Federal funds contin-
gent upon an airport owner’s agreement to make the
airport available for public use and without unjust dis-
crimination. As a result, a Federally-funded airport may
not ordinarily ban a whole class of service. In light of case
law, however, the FAA has carved out the following
exception to the general rule. This exception is referred to
as the multi-airport proprietor rule. It provides as fol-
lows:
Where the volume of air traffic is approaching
or exceeding the maximum practical capacity of
an airport, an airport owner may designate a
certain airport in a multiple airport system
under the same ownership and servicing the
same community for use by a particular class or
classes of aircraft. The owner must be in a posi-
tion to assure that all classes of aeronautical
needs can be fully accommodated within the
system of airports under the owner’s control
and without unreasonable penalties to any class
and that the restriction is fully supportable as
being beneficial to overall aviation system
capacity.
FAA Order No. 5190.6A.
The Airport Authority and Greenwood take issue
with the FAA’s multi-airport proprietor rule. They argue
that there is no valid distinction between multiple air-
ports controlled by the same owner, and multiple airports
acting under a plan devised by a regional planning orga-
nization. However, the Airport Authority has failed to
show that air traffic at Centennial Airport is approaching
App. 56
or exceeding the maximum practical capacity. For exam-
ple, in its answers to interrogatories, the Airport Author-
ity conceded that capacity was not a basis for the ban on
scheduled passenger service.°” Thus, it is unnecessary to
reach the issue of whether the Airport Authority has met
the other requirements of the multi-airport proprietor
rule.
For all of the reasons noted above, the Airport
Authority has failed to bear its burden of proving that the
civil aviation needs of the public require the ban.
IX. Proprietary Powers
The Hearing Officer determined that the Airport
Authority’s ban on scheduled passenger service violated
the Federal statute that preempts state and local regula-
tion of air carrier prices, routes, and service.*® He rejected
the Airport Authority’s claim that the ban falls within the
“proprietary powers” exception to the statute.9? The Air-
port Authority and Greenwood argue on appeal that he
erred in so doing.
37 See also Tr. 129, 250, 414.
38 49 U.S.C. § 41713(b)(1) provides, in relevant part, that “a
State [or] political subdivision of a State . . . may not enact or
enforce a law, regulation, or other provision having the force
and effect of law related to a price, route, or service of an air
carrier that may provide air carrier transportation. ... ”
39 49 U.S.C. § 41713(b)(3) provides, in relevant part, as
follows: “This subsection does not limit a State [or] political
subdivision of a State ... that owns or operates an
airport... from carrying out its proprietary powers and rights.”
eeoa has ire
App. 57
The Airport Authority argues in its appeal brief that
the ban falls within the “proprietary powers” exception
because the ban is necessary for the safe operation of the
airport and to serve the civil aviation needs of the public.
As discussed above, the Airport Authority has failed to
bear its burden of proving that the ban is necessary either
for the safe operation of the airport*® or to serve the civil
aviation needs of the public.41 Hence, its argument that
the ban falls within the “proprietary powers” exception
fails. The Hearing Officer did not err in finding that
Federal law preempts the ban.*
40 See supra p. 21.
41 See supra p. 24.
42 The Airport Authority and Greenwood also argue that
even if the Airport Authority’s total ban on scheduled
operations was unlawful, operations at Centennial Airport
would still be limited to nine-passenger aircraft, because a
Federal statute went into effect in 1996 requiring airports to
have a Part 139 certificate for scheduled operations involving
aircraft of more than nine-passenger seats (49 U.S.C. § 44706),
Centennial Airport does not have such a certificate, and the
statute provides (in 49 U.S.C. § 44706(f)) that airport sponsors
may not be forced to obtain a certificate.
While the Airport Authority and Greenwood argue that the
statute is self-executing, the agency’s position is that under 49
U.S.C. § 44706(e), the statute does not apply until 120 days after
the agency sends implementing regulations and an economic
impact report to Congress, and until that occurs, 30-passenger
aircraft may operate at Centennial Airport. This issue will not
be decided because it is not presented by the facts of this case. It
is undisputed that the Airport Authority’s ban on scheduled
passenger service is total. The Airport Authority sought and
obtained an injunction against Centennial Express’s six-
passenger aircraft.
App. 58
XI. Conclusion
The Hearing Officer correctly affirmed the Director’s
determinations that the Airport Authority violated the
following:
e 49U.S.C. § 47107(a)(1) and standard Airport
Improvement Program (AIP) grant assurance
no. 22 (prohibiting economic discrimination).
e 49 U.S.C. §§ 47107(a)(4) and 40103(e) and
standard AIP grant assurance no. 23 (prohib-
iting granting exclusive rights).
e 49 U.S.C. § 41713 (prohibiting state and local
regulation of air carrier prices, routes, or ser-
vices).
XII. Corrective Action
ACCORDINGLY, it is ordered that:
1. Arapahoe County Public Airport Authority (the
Airport Authority) present a plan to the Airports Divi-
sion, Northwest Mountain Region of the FAA within 60
days from the date of this final agency decision on how it
intends to address the FAA’s concerns by eliminating the
violations outlined above;
2. Pending FAA approval of the corrective action
plan specified in Ordering Paragraph 1, or until further
notice, the Airport Authority is ineligible to apply for
new FAA grants under 49 U.S.C. § 47106(d).49
43 The 180-day limit on suspension of eligibility contained
in Section 47106(d) applies only to applications to receive AIP
funds apportioned under 49 U.S.C. §§ 47114(c) ‘and (e). The
7
? ith
ieee
FURTHER:
If the Airport Authority does not submit a corrective
action plan in accordance with Ordering Paragraph 1
above, or petition for judicial review of this decision as
set forth below, the FAA proposes to issue an order under
49 U.S.C. § 47122 directing the Airport Authority to elimi-
nate the violations outlined above. The failure to comply
with that order would result in termination of the Airport
Authority’s eligibility for new FAA grants.
/s/ Susan L. Kurland
SUSAN L. KURLAND
Associate Administrator
for Airports
\
Issued on this 18th day of February, 1999.
Airport Authority is not eligible to receive these apportioned
funds. Therefore, the 180-day limit does not apply.
44 Persons with standing may seek judicial review of this
decision in an appropriate United States Court of Appeals. The
petition for review must be filed within 60 days. See 14 C.F.R.
§ 16.247 (“Judicial review of a final decision and order”) for
further information regarding judicial review.
App. 60
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
ARAPAHOE COUNTY PUBLIC
AIRPORT AUTHORITY, a
political subdivision of the State
of Colorado,
Petitioner, No. 99-9508
v.
FEDERAL AVIATION
ADMINISTRATION,
Respondent,
CITY OF GREENWOOD
VILLAGE,
Intervenor,
and
REGIONAL AIRLINE
ASSOCIATION,
Amicus Curiae.
ORDER
Filed May 7, 2001
\
Before BRORBY, Circuit Judge, McWILLIAMS, Senior
Judge and ELLISON,” District Judge.
*The Honorable James O. Ellison, Senior United States District
Judge for the Northern District of Oklahoma, sitting by
designation.
App. 61
Petitioner’s and Intervenor’s petitions for rehearing
are denied.
The petitions for rehearing en banc were transmitted
to all of the judges of the court who are in regular active
service as required by Fed. R. App. P. 35. As no member
of the panel and no judge in regular active service on the
court requested that the court be polled, that petition is
also denied.
Entered for the Court
PATRICK FISHER, Clerk of Court
by: /s/ Steve Larson
Deputy Clerk
App. 62
SUPREME COURT, STATE OF COLORADO
NO. 97SC123 April 13, 1998
ARAPAHOE COUNTY PUBLIC
AIRPORT AUTHORITY, a political
subdivision of the State of Colorado,
Petitioner,
Vv.
CENTENNIAL EXPRESS AIRLINES,
INC., a Colorado corporation; and
GOLDEN EAGLE CHARTERS, INC.,
d/b/a CENTENNIAL EXPRESS
AIRWAYS, INC., a Colorado
corporation,
. Respondents.
(Filed April 13, 1998)
Certiorari to the Colorado Court of Appeals
EN BANC JUDGMENT REVERSED
Brega & Winters, P.C.
Ronald S. Loser
Brian a. Magoon
Peter A. Gergely
Denver, Colorado
Attorneys for Petitioner
Bryant & Van Nest, LLC
Mark A. Pottinger, Of Counsel
Denver, Colorado
Attorneys for Respondents
App. 63
CHIEF JUSTICE VOLLACK delivered the Opinion of the
Court.
JUSTICE SCOTT concurs and specially concurs.
JUSTICE BENDER dissents, and JUSTICE MARTINEZ
joins in the dissent.
JUSTICE HOBBS does not participate.
We granted certiorari to review the court of appeals
decision in Arapahoe County Public Airport Authority v.
Centennial Express Airlines, Inc., 942 P.2d 1270 (Colo. App.
1996), to determine whether the court of appeals erred in
reversing a permanent injunction entered in favor of the
plaintiff, Arapahoe County Public Airport Authority (the
Authority), prohibiting the defendant, Centennial
Express Airlines, Inc., and its wholly owned subsidiary,
Golden Eagle Charters, Inc., d/b/a Centennial Express
Airways, Inc. (Centennial Express), from conducting
scheduled air carrier service in and out of Centennial
Airport (Centennial). We reverse.
L
Centennial was built in 1967 to serve the growing
aviation needs of the Denver metropolitan region and has
since become one of the largest and busiest general avia-
tion facilities in the country.! Centennial is located four-
teen miles southeast of downtown Denver and sits on
1 In 1988, Centennial ranked as the twenty-eighth busiest
airport in the United States. One year later, Centennial was
fourth nationally in based aircraft. In 1995, Centennial was the
second busiest general aviation airport in the country.
App. 64
approximately 1,200 acres of land in Arapahoe and Doug-
las Counties. In 1975, Arapahoe County established the
Authority pursuant to the Public Airport Authority Law,
sections 41-3-101 to -108, 17 C.R.S. (1973), to own and
operate Centennial as a political subdivision of the State.
The Authority owns all of the land and facilities at Cen-
tennial except for two runways which it leases from
Arapahoe County.
To fund airport construction and operations, the
Authority has accepted approximately $30.1 million in
federal grants. As a condition to accepting these grants
and pursuant to federal law, the Authority has given its
assurance that it “will make its airport available as an
airport for public use on fair and reasonable terms and
without unjust discrimination, to all types, kinds, and
classes of aeronautical uses.” A separate assurance pro-
vides that the Authority “may prohibit or limit any given
type, kind, or class of aeronautical use of the airport if
such action is necessary for the safe operation of the
airport or necessary to serve the civil aviation needs of
the public.”
Local, regional, and national planning schemes desig-
nate Centennial as a general aviation reliever airport for
Denver’s primary air carrier airports, Stapleton Interna-
tional (Stapleton), which closed in February of 1995 and
Denver International (DIA), which opened upon Sta-
pleton’s closure. Locally, resolutions passed by the Board
of County Commissioners of Arapahoe County in 1966
approved funding for the construction of a general avia-
tion airport. Newspaper accounts of open meetings held
following this funding approval indicate that county offi-
cials hoped to lure new industry and expand the county’s
App. 65
tax base by building an airport to “serve general aviation,
not scheduled carriers or military planes.” A new airport
would also ease general aviation overcrowding at Sta-
pleton. In one news report, the Federal Aviation Adminis-
tration (FAA) area director proclaimed that the airport
was “a much needed reliever terminal for general avia-
tion.”
Regionally, the Denver Regional Council of Govern-
ments (DRCOG), a planning organization of county and
municipal governments, has adopted several aviation
plans that guide the development and operation of air-
ports in the Denver area. Specifically, the 2010 Regional
Aviation System Plan (2010 Plan), which was published
by DRCOG in 1989, provides that Stapleton is the only
commercial air carrier airport in the region and desig-
nates Centennial “as a non-commercial passenger, trans-
port-category, general aviation reliever airport.”
Similarly, the Regional Aviation System Planning Pro-
gram Data File, which was published by DRCOG in 1991,
provides that Stapleton is the “air carrier facility for the
Denver region” and categorizes Centennial “as a non-
commercial passenger, transport category, G.A. reliever.”2
Nationally, the National Plan of Integrated Airport
Systems (NPIAS), which was presented to Congress by
the Secretary of Transportation in 1991, does not include
Centennial in its summary of Colorado’s primary and
2 In November of 1995, after the facts giving rise to this
dispute arose, DRCOG published the 2020 Regional Aviation
System Plan (2020 Plan) to update the 2010 Plan. The 2020 Plan
refers to Centennial as a “transport-category, general aviation
airport, [that] is a designated reliever to DIA.”
App. 66
commercial service airports. Instead, the NPIAS lists Cen-
tennial as a reliever airport intended to alleviate general
aviation congestion at Denver’s primary commercial air-
port through 1999.
Due to its planned role as a general aviation reliever
and strong opposition from citizens who live near the
airport, scheduled passenger service has never been
authorized at Centennial. While fixed-base air taxi and
charter flights are permitted, Centennial’s master plan,
which was published in 1981, provides that air taxi, char-
ter flights, and military use constitute less than one per-
cent of the airport’s total operations. Because scheduled
passenger service has never been permitted, Centennial
presently operates without a terminal, baggage system, or
passenger security system.
Despite Ceritennial’s lack of facilities, private efforts
have been made to bring scheduled passenger service to
the airport. In response, the Authority has increased
efforts to prohibit scheduled passenger service. On July
21, 1993, the Authority sent a letter to the United States
Department of Transportation (USDOT) asserting that the
Authority did not have to approve applications for sched-
uled passenger service and asking USDOT for its opinion
on the issue. On September 4, 1993, the Authority also
amended the “Minimum Standards for Commercial Aero-
nautical Activities” (the Standards) governing operations
at Centennial. These Standards now define “Airport Pur-
pose” as
any Authority action, undertaking or develop-
ment that is consistent in maintaining the non-
certificated status of the Airport and in preserv-
ing the Airport funding category as a “Reliever
App. 67
Airport” serving general aviation users. Under
no circumstances shall the Airport Purpose include
scheduled passenger services.
(Emphasis added.)
On December 20, 1994, Centennial Express began
scheduled passenger service out of Centennial to Dalhart,
Texas. Centennial Express has a valid air carrier certifi-
cate issued by the FAA.3 At the time of its maiden flight,
Centennial Express was aware of the Authority’s ban on
scheduled passenger service but chose to delay notifying
the Authority until the return flight from Dalhart. Cen-
tennial Express also issued a press release announcing
that it would soon provide scheduled passenger service
from Centennial to Amarillo, Colorado Springs, Grand
Junction, and other Western Slope airports in 1995. Addi-
tionally, Centennial Express planned to begin regular jet
flights from Colorado Springs to Chicago, Kansas City,
Houston, Dallas, Phoenix, Los Angeles, San Francisco,
and Seattle.
The following day, the Authority filed suit in Arap-
ahoe County District Court (the district court) seeking a
temporary restraining order and preliminary and perma-
nent injunctions preventing Centennial Express from con-
ducting scheduled passenger service out of Centennial.
On December 22, 1994, the district court granted the
Authority’s request for a temporary restraining order,
concluding in part that
3 The FAA certificate authorized Centennial Express to
carry up to 30 passengers for four scheduled round trips per
week, per destination, in aircraft weighing less than 75,000
pounds.
App. 68
[rJeal, immediate, and irreparable injury may be
prevented if [Centennial Express is] enjoined
from conducting and expanding illegal sched-
uled passenger service at the Airport. [Centen-
nial Express has] made a unilateral decision to
conduct illegal scheduled passenger service at
the Airport. [Centennial Express has] flaunted
the law by disregarding the Airport’s Minimum
Standards. [The Authority] manages the Air-
port. Indeed, [the Authority’s] reason to exist
turns on its ability to govern and manage the
Airport. If the requested relief is not provided,
[the Authority] will be stripped of its ability and
authority to manage the Airport.
On December 23, 1994, more than seventeen months
after the Authority’s initial request, USDOT responded to
the Authority’s letter as to whether it could ban sched-
uled passenger service at Centennial. In relevant part, the
USDOT’s letter provides as follows:
In addressing similar cases in the past, FAA has
found it arbitrary to exclude any particular class
of service due to factors that are not related to
the impacts of that service.
Although the material that [the Authority]
submitted states that approval of scheduled ser-
vice would increase the number of operations
and passengers at Centennial Airport, there was
insufficient information submitted with [the
Authority’s] letter to demonstrate that a restric-
tion of any particular category of operation
could be adequately supported. For example,
although individual factors are not alone likely
to be dispositive, [the Authority’s] letter does
not discuss the nature and extent of any result-
ing environmental impact, congestion, or effect
ee
App. 69
on airport facilities such as the terminal or park-
ing, that would result from the initiation of
scheduled service.
Later, the opinion letter states that the Authority’s
letter
also raises a policy issue relating to how to
harmonize several important goals - allowing
the citizens of a region to plan and manage their
aviation resources on a regional basis, while at
the same time preserving and enhancing the
performance of the national aviation system and
ensuring that statutory and regulatory require-
ments associated with use of federal grant funds
are not violated. . . . We firmly support regional
planning and decision-making and strongly
believe that local governments should, wherever
possible, plan, develop and operate their trans-
portation systems in an integrated and regional
context, consistent with applicable federal
law. ... 2
[W]here the volume of air traffic is approaching
or exceeding the maximum practical capacity of
an airport, an airport owner may designate a
certain airport in a multiple airport system
(under the same ownership and serving the
same community) for use by a particular class of
aircraft so long as the owner can assure that all
classes of aeronautical needs can be fully accom-
modated within the system of airports under the
owner's control. .. .
The issue that this raises is whether
[USDOT] should change its policy to extend the
flexibility now afforded to multiple airports
under joint ownership to individually-owned
App. 70
multiple airports which are planned and oper-
ated under a regional agreement. . . . Because
this would be a significant policy change, full
consideration by the public and the aviation
community is warranted. Therefore, we will be
initiating, early next year, a process to obtain a
full range of views on this issue.
On January 10, 1995, after conducting several hear-
ings, the district court entered a permanent injunction
prohibiting Centennial Express from conducting sched-
uled passenger service out of Centennial.4 Centennial
Express appealed and also filed a complaint with the
Federal Aviation Administration (FAA).5 The court of
appeals reversed the district court’s ruling, concluding
that the Authority’s regulation prohibiting scheduled
passenger service was preempted by 49 U.S.C.
§ 41713(b)(1) (1994). The court of appeals also held that
the district court should have left the question of whether
the Authority could prohibit scheduled passenger service
to the federal administrative agencies’ primary jurisdic-
tion.
4 At a January 5, 1995, hearing, the parties stipulated that
the district court would rule on the issue of permanent
injunctive relief in order to expedite this case for appeal. For this
reason, no preliminary injunction was issued in this case.
> Centennial Express’s FAA complaint was the second
challenging the Authority’s ban on scheduled passenger
service. The first complaint had been filed by an individual who
is not a party to this action. Both complaints are still pending.
App. 71
II.
At the outset, we must determine whether this court
should defer to the federal agencies’ holding concurrent
jurisdiction over this case. The doctrine of primary juris-
diction, or the deference doctrine, calls for judicial defer-
ence in cases involving technical questions of fact
uniquely within an agency’s expertise and experience, or
in cases where uniformity and consistency require admin-
istrative discretion. See Nader v. Allegheny Airlines, Inc.,
426 U.S. 290, 303-04 (1976); Columbia Gas Transmission
Corp. v. Allied Chem. Corp., 652 F.2d 503, 519 n.14 (5th Cir.
1981); Great Western Sugar Co. v. Northern Natural Gas Co.,
661 P.2d 684, 690 (Colo. App. 1982). No fixed formula
exists for deciding when to invoke this doctrine, but it
should be utilized reluctantly where the issue is Strictly a
legal one that is within the conventional competence of
the courts. See Great Western Sugar, 661 P.2d at 690.
The issues in this case do not involve complex ques-
tions of fact. Rather, we have been asked to consider
whether the district court properly enjoined Centennial
Express from conducting scheduled passenger service out
of Centennial. As defenses, Centennial Express claims
that (1) the Authority’s regulation prohibiting scheduled
passenger service at Centennial is preempted by federal
law and (2) the ban on scheduled passenger service vio-
lates the terms of the Authority’s federal grant assur-
ances. In our view, these legal and interpretive questions
do not “go beyond the understanding of judges” or lay
“at the heart of the task assigned the agency by Con-
gress.” See Mashpee Tribe v. New Seabury Corp., 592 F.2d
575, 580-81 (1st Cir. 1979).
App. 72
Additionally, the FAA has yet to rule on either of the
complaints despite the fact that they were filed more than
three years ago. Similarly, although the USDOT opinion
letter alludes to “initiating, early [in 1995], a process to
obtain a full range of views on” its policy regarding
individual airport participation in regional airport plan-
ning, we have no indication from the parties or USDOT
that sich efforts have begun. Because there is a strong
public interest in resolving this case promptly, we refuse
to defer to administrative action which is of “uncertain
aid and uncertain speed.” See id. at 581.°
Centennial Express also points to the USDOT opinion
letter in arguing that deference is warranted in this case.
In Banner Advertising, Inc. v. People, 868 P.2d 1077, 1083
(Colo. 1994), we addressed the level of deference we must
afford an opinion letter issued by the FAA. Specifically,
we explained:
© Contrary to the court of appeals, we do not view New
England Legal Foundation v. Massachusetts Port Authority, 883 F.2d
157, 171 (1st Cir. 1989), as dispositive here. In that case, the
Second Circuit held that the district court erred in ruling on the
merits of a case involving the imposition of landing fees at
Boston’s Logan Airport when the same issue was pending
before the FAA. In the Second Circuit’s view, the following
federal actions, in addition to an FAA complaint, justified
deferring to the FAA in that case: (1) the Secretary of
Transportation had ordered a formal investigation into the
complaint; and (2) the United States, as amicus curiae, had urged
the district court to issue an injunction preserving the status quo
until the USDOT’s investigation was complete. See id. In this
case, we are aware of no formal investigation into the FAA
complaints and have received no indication from the federal
government that reviewing the merits of this case is, in its view,
inappropriate. |
App. 73
[T]he opinion of the FAA's chief counsel .. . was
not reached as a result of hearing adversary
proceedings in which he found facts and
reached conclusions of law. It is in no way bind-
ing on a court. Nevertheless, the letter was writ-
ten as part of the official duties of the chief
counsel, and is based on a level of more spe-
cialized expertise than most judges possess, so
we may properly look to it for guidance. While
opinion letters from administrative agencies are
not binding authority, they can be used as per-
suasive authority.
Id. Contrary to Banner, where we chose to defer to the
agency’s letter, we believe the USDOT’s opinion letter in
this case does not require deference. First, the letter is
brief, contains no federal preemption analysis, and fails
to cite any federal cases for its propositions. Second, the
letter is inconclusive because it states that the Authority
submitted “insufficient information” on the impact
scheduled passenger service would have at Centennial.
Third, because the opinion letter is only persuasive
authority, it is not binding on this court. See id.
In this case, Centennial Express began scheduled pas-
senger service in clear defiance of the Authority’s regula-
tions, before the USDOT’s opinion letter was issued, and
before filing its FAA complaint. Nevertheless, Centennial
Express asserts that even though it has disregarded valid
regulations passed pursuant to state law, we must defer
to the federal agencies’ concurrent jurisdiction. We dis-
agree. If we defer to the federal agencies, we would
affirm Centennial Express’s course of conduct and fore-
close the Authority’s only avenue of relief. This would
allow future airport users to unilaterally conduct and
App. 74
continue operations in violation of airport rules so long
as they implicate federal jurisdiction in some way. Under
these circumstances, we refuse to defer to the federal
agencies’ concurrent jurisdiction.
IIl.
Centennial Express argues that the ban on scheduled
passenger service is preempted by federal law. We dis-
agree.
Congress radically altered the character of commer-
cial aviation when it amended the Federal Aviation Act
and deregulated the airline industry pursuant to the Air-
line Deregulation Act of 1978 (ADA). See Pub. L. 95-504,
92 Stat. 1705. In so doing, Congress determined that
market forces were better suited for promoting efficiency,
innovation, low prices, variety, and quality in the air
transportation industry. See Morales v. Trans World Air-
lines, Inc., 504 U.S. 374, 378 (1992). However, the absence
of federal regulation caused concern in Congress that
individual states would pass inconsistent and conflicting
laws regulating the airline industry. See H.R. Rep.
95-1211, at 15-16 (1978) reprinted in 1978 U.S.C.C.A.N.
3737, 3752; see also Margolis v. United Airlines, Inc., 811 F.
Supp. 318, 320-21 (E.D. Mich. 1993). Consequently, the
ADA included a provision that preempted all state laws
relating to the rates, routes, or services of an interstate air
carrier. See 49 U.S.C. § 1305(a)(1) (Supp. II 1979). Cur-
rently, 49 U.S.C. § 41713(b)(1) (the ADA preemption pro-
vision) provides that a political subdivision of a state
“may not enact or enforce a law, regulation, or other
—
App. 75
provision having the force and effect of law related to a
price, route, or service of an air carrier.”7”
Two cases from the United States Supreme Court
offer guidance on the scope of the ADA preemption
provision. In Morales, several airlines filed suit against
the State of Texas seeking injunctive relief prohibiting
enforcement of state regulations pertaining to airline fare
advertising. The airlines argued that the regulations were
preempted by the ADA preemption provision. Relying
upon cases in which the Supreme Court interpreted a
similarly worded preemption provision in the Employee
Retirement Income Security Act of 1974 (ERISA), the
Court determined that the ADA preemption provision
expressed a broad preemptive purpose that included all
“State enforcement actions having a connection with or
reference to airline rates, routes, or services.” Morales, 504
U.S. at 383-84; see also American Airlines, Inc. v. Wolens, 513
U.S. 219, 223 (1995). The Morales Court noted, however,
that preemption was inappropriate where the state action
affects airline rates, routes, and services “in too tenuous,
remote, or peripheral a manner.” See Morales, 504 U.S. at
390; Wolens, 513 U.S. at 224.
* Congress reenacted Title 49 in 1994. Previously, 49 U.S.C.
§ 1305(a)(1) provided in relevant part that “no State . . . 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 carrier.” Although the language of this
Statute differs slightly from 49 U.S.C. § 41713(b)(1), Congress
intended the revision to make no substantive change. See
Amencan Airlines, Inc. v. Wolens, 513 U.S. 219, 223 n.1 (1995).
Therefore, even though many of the cases cited in this opinion
interpret 49 U.S.C. § 1305(a)(1), this opinion refers to both
§ 1305(a)(1) and § 41713(b)(1) as the ADA preemption provision.
App. 76
In New York State Conference of Blue Cross & Blue Shield
Plans v. Travelers Insurance Co., 514 U.S. 645, 654-56 (1995),
the Supreme Court explained that it may have interpreted
the “relate to” language in prior ERISA cases too
broadly. Specifically, the Court explained:
If “relate to” were taken to extend to the fur-
thest stretch of its indeterminacy, then for all
practical purposes pre-emption would never
run its course, for really, universally, relations
stop nowhere. But that, of course, would be to
read Congress’s words of limitation as mere
sham, and to read the presumption against pre-
emption out of the law whenever Congress
speaks to the matter with generality. That said,
we have to recognize that our prior attempt to
construe the phrase “relate to” does not give us
much help drawing the line here.
Id. at 655 (citation and internal quotation marks omitted).
Instead, the Court explained that it must address ERISA
preemption cases “with the starting presumption that
Congress does not intend to supplant state law.” Id. at
654. With this presumption in mind, the Court then
® Although Travelers does not concern aviation law, Morales
explains the connection to ERISA cases as follows:
[W]e have held that a state law relates to an employee
benefit plan, and is pre-empted by ERISA, if it has a
connection with, or reference to, such a plan. Since
the relevant language of the ADA is identical, we
think it appropriate to adopt the same standard here.
Morales, 504 U.S. at 384 (citation and quotation marks omitted).
Travelers is therefore highly instructive on the Supreme Court’s
current approach towards interpreting “identical” language in
the ADA preemption provision. Id.
App. 77
explained that it “simply must go beyond the unhelpful
text and the frustrating-difficulty of defining its key term,
and look instead to the objectives of the ERISA statute as
a guide to the scope of the state law that Congress under-
stood would survive.” Id. at 656.
Despite the broad reach the Morales Court gave the
ADA preemption provision, the Travelers decision estab-
lishes a less literal method for determining whether state
regulations concerning aviation are preempted. Speci-
fically, Travelers counsels that we should first presume
“that Congress does not intend to supplant state law.” Id.
at 654. Then, we must review the objectives of the statute
in defining “the scope of the state law that Congress
understood would survive.” Id. at 656.
Turning to the facts of this case, we believe that the
Authority’s ban on scheduled passenger service is not
preempted. Because the regulation concerns an area of
local and regional planning, it will not lead to inconsis-
tent or conflicting state regulations.? Therefore, the
° Besides planning Centennial’s operations on a local level,
the Authority’s ban on scheduled passenger service also reflects
the airport’s regional role as a general aviation reliever for
Denver’s primary commercial airport. Other federal statutes
indicate a willingness to cooperate with and defer to this type of
local and regional aviation planning. See 49 U.S.C. § 40101(a)(8)
(1994); 49 U.S.C. § 47101(g) (1994). Specifically, 49 U.S.C.
§ 47101(g) provides in pertinent part that
the Secretary of Transportation shall cooperate with
State and local officials in developing airport plans
and programs that are based on overall
transportation needs. The airport plan
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