# Petition for Writ of Certiorari — Arapahoe County Public Airport Authority v. Federal Aviation Administration > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_2256%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2001 - **Citation:** 534 U.S. 1064 ## Text \ 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 —_—_ oe = - : = 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 airpo [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386014_2256%3A1. Public record. Not legal advice.